Case Law Details
Jayamma Xavier Vs Registrar of Firms (Kerala High Court)
Section 4 of the Partnership Act permits Constitution of a firm or partnership between one or more persons. 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. The judgment in Pulimood’s case (supra) where the Private Company was held entitled to be a partner would apply in the present case though the LLP is not a private company but is a legal entity.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
Ext.P2 order passed by the Registrar of Firms declining registration of a partnership firm constituted by the petitioner is under challenge in this Writ Petition. The reason stated in Ext.P2 is that a LLP cannot be a partner of a firm.
2. Petitioner claims to be the designated partner of Sleeplock LLP which is a limited liability partnership registered under the Limited Liability Partnership Act, 2008 (for short “LLP Act”). The Sleeplock LLP formed a partnership firm along with one Gourav Raj in the name and style of M/s.Morning Owl Sleep Solutions. A partnership deed was executed accordingly on 18.09.2020. The said deed -Ext.P1 was submitted for registration before the respondent. The respondent rejected the same on the ground that LLP cannot be a partner of a firm. Petitioner has stated that the partnership is formed in order to carry out the business of processing, manufacturing, trading, importing, exporting, distribution and sales of furnished and semi-furnished mattress, latex form cores, pillows, rubberised coir, coconut rubber, other rubber and coir products, through retail outlets and through online platforms.
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