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Can you please clarify the difference between limited liability and unlimited liability.
With limited liability the liability of the members is limited. With unlimited liability, the liability of the members is unlimited. What else can I say?
This has always been confusing for me. With limited liability they are only limited to the amount of capital put in or they are required to settle all the debts
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With a unlimited liability all of the partners are jointly and severally liable. Jointly meaning that each partner is fully liable for all the firm’s debts and severally meaning the they can all be sued simultaneously by a third party. Also if the partner has unlimited liability their personal assets are at risk.
With limited liability is just means that the amount that the partner is liable to is limited to their contribution. So basically their personal assets are definitely not at risk
Hope that helps
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If the partner has limited liability they still can be sued by a third party for more than their capital contribution and they will have to pay it. BUT they can then claim that money back from their partners under the limited liability agreement that they have…
If a limited liability partner (under the Limited Partnerships Act 1907) takes part in the management of the firm, they BECOME liable as though they were a general partner – ie fully liable
Limited liability works for a partner so long as the people dealing with the firm KNOW that he is a limited partner. We can achieve this by publishing the fact in the gazette and on all business letters and order forms. If we have done this, it will likely be deemed to be having given notice to the third party of the limitation of liability.
But if the notepaper carries no such legend, then the innocent third party may successfully sue even the limited partner but, as pointed out by kudzi, the limited partner himself could then sue the other general partners
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