The Kerala High Court on Thursday held that a Limited Liability Partnership (LLP) can form a partnership with an individual or other persons.
In this case, Petitioner claims to be the designated partner of Sleeplock LLP which is a limited liability partnership registered under the Limited Liability Partnership Act, 2008. The partnership deed was executed between an individual and an LLP. The said deed was submitted for registration before the respondent. The respondent rejected the same on the ground that LLP cannot be a partner of a firm.
The single judge bench of Justice P.V. Asha observed, ”The liability of partners of LLP and liability of the LLP as a partner under the Partnership Act would be different. The liability of partners in an LLP cannot have any relevance when the LLP itself becomes a partner, when it would be bound by the provisions in the Partnership Act. The liability of the LLP would be as in the case a company which joins a firm after entering into a partnership.”
Further the Court stated that In this case the partnership deed was executed between an individual and an LLP which is a body corporate having a legal entity and coming within the definition of “person”. The individual liability of the partners of LLP would not be relevant when the LLP itself would have liability independent of the liability of the partners. Therefore, the difference in the provisions under the Partnership Act relating to liability of the firm or the individual partners would not stand in the way of constitution of a partnership with an LLP. Hence I find that LLP cannot have a disqualification from entering into a partnership with an individual or other persons.