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Which of the following statements about limitied liability partnerships is true
1)a written partnership agreement must be registered with the registrar of companies
2)a limited liability’s partnership is a corporate body which has a separate legal personality from its members
3)at least one general partner must be appointed with unlimited liability for the debts of the firmHere they are showing the correct option is 2 but I tried a online test and they said its option 3 so now I m so confused can u please help me what’s the correct answer and why
Hi
Option 1 – yes a LLP must be registered with the Registrar of Companies but it is NOT necessary for it to have a WRITTEN agreement – so option one is incorrect
Option 2 – the fundamental idea behind the existence of a LLP is to safeguard the partners from unlimited liability. So, yes, it IS a separate legal entity distinct from the identities of its members
Option 3 – following on from option 2, the idea is to protect the partners from unlimited liability. And therefore, as a consequence, it is NOT necessary for there to be at least one general partner with unlimited liability.
It seems to me that you are confusing the two separate animals a ‘limited liability partnership’ and a ‘limited partnership’.
In a limited partnership, it IS necessary for there to be at least one general partner with unlimited liability … but that’s not what this is related to!
OK?
In LLP two designated members are the requirement and in LP one member with unlimited liability is a must am I right sir ?
No – if I have understood your post correctly. The idea of an LLP is that the liability of the members of the LLP shall have limited liability (hence the name)
So there is no equivalent minimum number of liable partners – LLP no partner is unlimitedly liable. In a LP, there must be at least one general partner.
Is that clear now?
You are so right! It is confusing – a bit!
I put your question into AI and AI tells me that designated members DO have unlimited liability. Now I KNOW that that is not correct so I’ve pursued it further and found this website that I believe will fully and clearly answer your confusion.
Try this:
https://www.qualitycompanyformations.co.uk/blog/difference-ordinary-designated-llp-members/
If you’re no clearer after this, let me know.
OK?
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