In: Accounting
Mohammed & Mahmood LLP had two partners, Mr. Mohammed and Mr. Mahmood. The partnership was registered as limited liability partnership. Five years later Mr. Mohammed entered an official lease with LL Partners, which subsequently assigned the lease to Mr. Ahmed. Three years later Mr. Mohammed stopped paying the lease. Mr. Ahmed filed a suit individually against Mr. Mohammed and Mahmood and against the partnership. Mr. Mahmood defended his status that he was in no way connected with the lease. The trial Court denied Mr. Ahmed’s motions.
1- The lease agreement entered by Mr. Mohammed is official in nature and cannot be treated as personal in nature, for Mr. mohammed and Mr. Mahmood and therefore they both are not personally liable for the same, in case Mohammed and Mahmood LLP they can be liable upto the capital contributed by them and no personal liability could incurre.
2. Since the lease agreement was official in nature, in the name of Mohammed & Mahmood LLP . Mr. Mahmood can win the case and be relieved in personally, but will be in the name of Mohammed & Mahmood LLP upto his share of capital if suit against the firm survived.
3. Yes partnership is liable for the claims , put forward by Mr. Ahmed .
4. As per commercial company law Mr. Ahmed can suceed in his claim against the LLP and not against Mr. Mohammed & Mr. Mahmood, Since Mohammed & Mahmood LLP is a seperate legal entity as per Article 3 of the commercial company law.