Rights and Duties of Partners in an LLP

A Partner in a Limited Liability Partnership (LLP) has certain duties and rights. In this article we have covered those duties and rights that a partner has in an LLP.

Some are the Rights and Duties of a Partner in an LLP

General Duties of Partners in LLP

The partners in an LLP are bound to conduct the business of the LLP to a common advantage; to be just and faithful to each other, and to render true accounts and full information of all the things which are affecting the firm or any of the partners. 

Duty pertaining to indemnify for fraud

Each and every partner of an LLP is expected to indemnify the LLP for any losses which are caused due to some 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 of the concerned LLP typically enjoys the following rights:

• Every partner of the LLP has the right to take part in the conduct of the business of the LLP.
• Every partner is bound to attend to his/her duties diligently in the conduct of the business of the LLP.
• Any difference which may arise due to ordinary matters connected with the business is ought to be decided by a majority of the Partners and every Partner shall have the right to express his/her opinion before the matter is resolved.
• Each and every partner has a right to have access and inspect the copy of the book of accounts of the LLP.
• In the event of a death of any Partner, his/her heirs or legal representatives shall have the right to access, inspect to the copy of the book of accounts of the concerned LLP.

Implied Authority of Partner

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

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

• Submit a dispute that relates to the business of the LLP to arbitration
• The opening of a bank account on behalf of the LLP in his/her name
• Compromise or relinquish any claim or portion of a claim by the LLP
• Withdrawal of a suit or proceeding filed on behalf of the LLP
• Admitting any liability in a particular suit or proceeding which lies against the LLLP
• Acquiring of the immovable property on behalf of the LLP
• Transferring of the immovable property that belongs to the LLP

Property that belongs to LLP

When subjected 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 LLP Duties 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 the property, rights and interest in the assets, both tangible and 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 business of the LLP.