Contributions [Sections 32 — 33]

Two friends start an LLP for a home-baking brand. One brings ₹5 lakh in cash. The other has no cash but promises to design the packaging, run the Instagram page and cook every weekend for the first year. Are they equal partners? Can the second friend's promise be counted as her contribution? And if she quietly gets the others to let her off the promise, can the bank that lent money to the LLP because of it still hold her to it? Sections 32 and 33 of the LLP Act are short but they answer all three.

In two minutes

A partner's contribution to an LLP can be money, property or benefit of almost any kind, including services, and the obligation to make it comes from the LLP agreement; creditors who relied on that obligation can enforce it even if the partners privately compromised it.

The rest of this chapter

The full explanation, the cheat sheet, every previous-year question at every mark weight, the quiz and the answer skeletons are part of Contract – II on LexBlox Semester. Sign in to unlock the subject, or read Module 1 of Legal Language and Writing free.