Investigating the Affairs of LLP
Created on 20 Aug 2018
Wraps up in 2 Min
Read by 1.9k people
Updated on 19 Oct 2019
A limited liability partnership, as its name suggests is a business organization where through the partners bring investment in the firm, they have a limited liability towards the dues of the partnership. Therefore, it provides the advantage of limited liability of the partners, like a company, and the organization and management of their entity, like a partnership.
Investigating the affairs of LLP
The Central Government shall appoint one or more competent persons as inspectors, to investigate the affairs of a limited liability partnership and to report thereon in such manner as it may direct-
- if not less than one-fifth of the total number of partners of the limited liability partnership make an application along with supporting evidence and security amount as prescribed; or
- if the limited liability partnership makes an application that the affairs of the limited liability partnership ought to be investigated; or
- if, in the opinion of the Central Government, there are circumstances suggesting-
- that the business of the limited liability partnership is being conducted with an intent to defraud its creditors, partners or any other person, or otherwise for a fraudulent or unlawful purpose, or in a manner oppressive or unfairly prejudicial to some or any of its partners, or that the limited liability partnership was formed for any fraudulent or unlawful purpose; or
- that the affairs of the limited liability partnership are not conducted in accordance with the provisions of this Act; or
- that, on receipt of a report of the Registrar or any other investigating or regulatory agency, there are sufficient reasons that the affairs of the limited liability partnership be investigated.
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