CA Inter P2 · Chapter 11 · Question 9 of 11
Under section 30, where an act is carried out by an LLP or any of its partners with intent to defraud its creditors:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) The liability of the LLP and of the partners who acted with that intent is unlimited for all or any of the debts or liabilities of the LLP
Explanation
Section 30(1) provides that where an act is carried out with intent to defraud creditors or for any fraudulent purpose, the liability of the LLP and of the partners who acted with that intent is unlimited for all or any of the LLP's debts. Partners who were not involved are not made liable without limit. Section 30(2) also provides punishment for those who were knowingly parties to the act.
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