Section 3 of LLP Act, 2008 : Section 3: Limited Liability Partnership To Be Body Corporate

Explanation using Example

Imagine Sarah and Raj start a graphic design business together and decide to form a Limited Liability Partnership (LLP) called "CreativeVisions LLP". According to Section 3(1) of the LLP Act, once they register their LLP, it becomes a separate legal entity from Sarah and Raj. This means that the LLP can own property, enter into contracts, and be sued in its own name.

Five years later, Sarah and Raj are still running "CreativeVisions LLP", which has now become a well-known brand. The LLP continues to exist independently of its founders' personal lives, illustrating Section 3(2) that an LLP has perpetual succession. Even if Sarah or Raj retire or pass away, the LLP can continue to operate.

Later, Raj decides to leave the partnership, and a new partner, Alex, is brought in. Despite this change in partnership, according to Section 3(3), "CreativeVisions LLP" will continue to exist without any effect on its rights or liabilities. The contracts and obligations entered into by the LLP before the change in partners remain valid, and the business operations continue seamlessly.