Thank you for visiting Partners in a limited liability partnership LLP are not liable for the liability of the partnership Discuss the accuracy of this statement A Completely true. This page is designed to guide you through key points and clear explanations related to the topic at hand. We aim to make your learning experience smooth, insightful, and informative. Dive in and discover the answers you're looking for!
Answer :
The statement about liability in an LLP is mostly true, as partners in an LLP have their liability limited to their investment and typically do not risk their personal assets. However, they may be liable for their own wrongful actions or negligence. Therefore, option b) Mostly true is the correct answer.
The statement that partners in a limited liability partnership (LLP) are not liable for the liabilities of the partnership is mostly true (b). In an LLP, partners' liabilities are generally limited to their investments in the company. This means that they would not typically risk losing their personal assets, such as home, car, or personal bank accounts if the company were to fail.
However, if one partner engages in wrongful actions, such as fraud or theft, other partners in an LLP might still be liable for those specific actions. This is different from a general partnership, where each partner has unlimited personal liability for the debts and obligations of the business.
While LLPs offer some protection, they are not bulletproof. Such partnerships may carry insurance to cover certain risks, and partners may still be responsible for their own acts of negligence or misconduct.
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