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Limited Liability Partnership - Essay Example
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. ...