Limited liability partnership is a concept relating to the liability of the partners as it implies from its name. As we all know that in the partnership form of conducting business, every partner is responsible by law for the actions and deeds of other partners in the business…
In a general format of partnership business it is a legal practice that all partners have unlimited liabilities with respect to their business debts and if one person is declared insolvent then the other partners are bound by law to pay for his debts, loans and liabilities from their own personal assets and property.
Limited liability on the other hand is not the same as other partnership concerns; it differs a lot in the liability context from other partnership businesses. With respect to the liability clauses, it is more resembling to the corporation. Limited liability means that partners have limited liabilities with respect to their debts and loans of the firm. One partner is not jointly and severally responsible for the actions and deeds of other partners and that his personal assets will not be used to pay for the liabilities of the firm or other partners. Therefore, every partner in the partnership firm will have limited liability towards the liabilities of the firm and other partners in the firm as well. This is very much same to the limited liability company in which every member of the company is responsible to pay for the liabilities of the company to the extent he has invested into the company. Therefore, a limited liability partnership can be defined in the following words:
Thepartneror investor's liabilityislimitedto theamounthe/she has invested in thecompany. Thissetuptypically prevents each partner from beingheldaccountablefor the wrongdoings of another partner. Although an LLP can be used in manyfields, it is most commonly used inlawor accountingfirms. The laws relating to an LLP differ significantly betweencountries, and even from state to state.
As the definition states that the liability of the partner or investor is limited to the extent of amount he or she has invested in the firm and that this type of partnership prevents one partner for being held responsible for the work of other partners. It is also stated that this partnership can be used in many fields but this sort of partnership is particularly important for professional firms. In professional firms as the size of the firm started to grow and more and more partners were needed to perform the work in the firm, there was a great threat of extra ordinary risk involved in the addition of other partners in the partnership firm where every partner is an agent of other partners and jointly and severally responsible for the work of other partners. Therefore, there is thought to be dire need of forming limited liability partnerships in the professional firms where matters relating to high financial values are very important to the firm and the firm's professional advice is being given relating to those high valued matters. If anything goes wrong due to the recklessness of one partner then other partner should not be held responsible for the wrong doings of that partner. The requirements for the formation and conduction of business as a limited liability company as mentioned in the law of United Kingdom under the respective acts are described in the following paragraphs.
The set up requirements as mentioned in t ...
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(Limited Liability Partnership Essay Example | Topics and Well Written Essays - 2250 Words)
“Limited Liability Partnership Essay Example | Topics and Well Written Essays - 2250 Words”, n.d. https://studentshare.net/miscellaneous/302199-limited-liability-partnership.
This is because it requires a delicate balance of ideas and arrangement such that both partners agree to co-operate with each other and advance their mutual interest (Wood 21). A common ground is often established within which the two parties work together while at the same time achieving their own goals.
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It must be noted, however, that limited liability companies may not necessarily work for profiteering (Jitman, 2009). This is a hybrid form of business that has characteristics of both sole proprietorship and partnership. Some of the reasons why the business has become so popular are: - 1) Limited Liability: - The clause of limited liability ensures that the owners/shareholders are responsible for no more than the amount they invested in the business.
This paper seeks to explore the two forms of business organizations. The paper will discuss the nature of the organizations that define their roles as well as advantages and disadvantages that are associated with the two forms. Limited liability partnerships and their roles A limited liability partnership is a special type of partnership in which partners’ liabilities are limited to their responsibilities.
Name Course Course Instructor Date Limited Liability Partnership As a young entrepreneur, I intend to start a technology business, which deals with creating a social network intended for the people. The aim of my business will be to give the public a social networking establishment that will allow people to communicate all over the world.
The Limited Liability Partnerships Act 2000 is an Act of Parliament which introduced the concept of the limited liability partnership into English and Scottish law (wikipedia.com).
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The paper will detail and analyze the need for a change in the LLP law to make it more effective in terms of functioning for both the state and the business as such.
Unlimited partnership has been the form of business for many years for professionals especially in the case of chartered accountants, lawyers, architects, vetenarians and many other professionals.
LLC is an ideal choice for those business owners who would like to take advantage of tax benefits offered thereof, while also able to install an organizational structure resembling a private or public corporation.
One of the key advantages of limited liability
focuses on briefly discussing the other types of businesses which would build a basis for the next section of the paper were the core discussion regarding Limited Liability Partnerships would take place. This paper would start by discussing the simplest form of business, which