Rights-of-Partner-in-LLP

Duties and Rights of Partner in LLP

Duties and Rights of Partner in LLP

A Partner in a Limited Liability Partnership (LLP) has certain duties and rights. Such, duties and rights of a Partner are reviewed in this article.

General Duties of Partners in LLP

Partners are bound to carry on the business of the LLP to the common advantage, to be just and faithful to each other, and to render true accounts and full information of all things affecting the firm to any partner.

Duty to Indemnify for Fraud

It requires that every partner of an LLP to indemnify the LLP for any losses through the occurrence of fraud in the conduct of the business of the firm.

Rights of Partners in an LLP

Subject to the LLP Agreement between the Partners, a Partner in an LLP typically has the following rights:

  • Every Partner has a right to take part in the conduct of the business of the LLP.
  • Every Parter has to attend diligently to his/her duties in the conduct of the business of the LLP.
  • The majority of the Partners would decide in case of any difference arising due to ordinary matter which connects with the business and every Partner shall have the right to express his/her opinion before the matter is decided.
  • Every Partner has a right to have access and to inspect and copy the book of accounts of the LLP.
  • In the event of the death of a Partner, his/her heirs or legal representatives shall have the right to access, inspect and copy any of the books of accounts of the LLP.

Implied Authority of Partner

The authority of a Partner to bind the LLP, in case of an act or transaction process, in the usual way business is carried on by the LLP, binds the LLP. This authority of the Partner is called the implied authority.

In the absence of any authorization or custom of trade, implied authority does not empower a Partner to:

  • Submit a dispute relating to the business of the LLP to arbitration.
  • Open a banking account on behalf of the LLP in his/her own name.
  • Compromise or relinquish any claim or portion of a claim by the LLP.
  • Withdraw a suit or proceeding filed on behalf of the LLP.
  • Admit any liability in a suit or proceeding against the LLP.
  • Acquire immovable property on behalf of the LLP.
  • Transfer immovable property belonging to the LLP.

Property Belonging to LLP

Subject to the LLP Agreement, the property of the LLP would include all the property and rights and interest in assets originally brought into the stock of the LLPDuties of Partner in LLP, or acquired, or generated in the course of the business of the LLP, and also includes the goodwill of the business. All property, rights and interest in assets (tangible or intangible) acquired or developed with the money of the LLP are deemed to belong to the LLP.

Subject to the LLP Agreement, all the property of the LLP shall be held and used by the LLP Partners exclusively for the purpose of the business of the LLP.

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