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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?
I read that post and now I m even more confused ordinary partner can participate in the running of the business ? in the article it seems like it’s the duty of designated members plus designated members will be liable if they don’t full fill their duties properly but the question still remains will they be liable for the debts of the partnership
Another question sir
Which two of the following are automatically unfair grounds for dismissing an employee
A)engaging in trade union activity
B)constructive dismissal
C)dismissal on transfer of employment to a new undertaking
D)redundancy
Here they are showing that correct answer is a and c but constructive dismissal is also a unfair dismissal so why not bZainab, NO partner is unlimitedly liable for the partnership debts in a Limited Liability Partnership.
Designated members have obligations and responsibilities beyond those imposed on the non-designated partners. But, as the article says, in practice, all the members of a LLP tend to be designated. Their ‘additional’ obligations include matters like liaising with auditors, compliance with legislation … – as illustrated in the article. But the WHOLE concept of the beast that is a LLP is that partners are NOT faced with the possibility of personal bankruptcy.
In exactly the same way that a shareholder / member is not liable for the company’s debts, a member of a LLP is not liable for the partnership debts.
This is NOT the same as the liability of the general partners in a Limited Partnership (ie not an LLP). In a limited partnership, the general partners are wholly liable for the partnership debts but the limited partners are not similarly liable … UNLESS they take an active part in the running of the firm in which case they BECOME liable for the firm’s debts and liabilities incurred during the period of their active participation.
How are we doing now?
Is that ok now? I sincerely do hope so because I’m feeling guilty – my answers appear to confuse you even more than when you started. Look at that link that I sent in my last response and, as usual, if you’re still not happy, post again
Zainab, 2 points re your second question
1 These threads are there to assist not just you but any other Law student that is struggling to grasp the concepts of what’s involved. But without giving some indication of the subject matter in the thread heading, the threads are not going to be at all useful. A heading of ‘Need Help’ is not telling anyone which area of law is about to be disseminated. Much better for the previous question would have been, for example ‘Limited Liability Partnerships’. OK
2 Because this second post is about employment law and, particularly, unfair dismissal it will ideally be the subject of a new separate thread with a heading like ‘Unfair dismissal’.
So I’m going to ask you to repost it in a new thread. It’s now fast approaching midnight in my part of the World so I’ll not likely get to answer it until after I have enjoyed my beauty sleep. But I shall answer it 🙂
Tomorrow!
OK?
I would rather not look at that link ? but what u just explained that’s pretty clear it’s just like how company works the shareholders are not personally liable same way in LLP members are not liable
I thought u just ask questions never crossed my mind that they can help other students will definitely ask questions carefully with proper title now
Sleep well sir !!!!Zainab, thank you so much for your good wishes – they obviously worked – I slept very well 🙂
Glad that we are now sorted out with partners’ liabilities for partnership debts. I’m pleased and relieved to hear that.
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