16 Questions
What distinguishes a limited liability partnership (LLP) from a traditional partnership under the UK Partnership Act 1890?
Each partner has limited liability similar to that of corporate shareholders
What distinguishes the power structure in an LLP from that of a corporation?
Partners have the power to manage the business directly
What is the tax liability level in an LLP compared to a corporation?
Lower tax liability
In an LLP, what are partners personally liable for?
The negligence or misconduct of other partners
How does the liability of partners in an LLP differ from that of corporate shareholders?
Partners have limited liability similar to that of corporate shareholders
Under the UK Partnership Act 1890, what type of liability do partners have in a traditional partnership?
Joint and several liability
What is one reason professional-services firms find the partnership structure attractive?
Protection from liability for individual negligence of other partners
What effect does limited liability have on the opportunities for new business growth?
Enables opportunities for new business growth
What negative consequences can be associated with limited liability for stakeholders in some jurisdictions and industries?
Adverse effects from audit failures
Which action did some large accountancy firms in the UK take to relieve themselves of owing the 'duty of care' to individuals and clients adversely affected by audit failures?
Reorganizing as LLPs and LLCs
What did PricewaterhouseCoopers and Ernst & Young hire the legislature of Jersey to enact?
An LLP Bill awarding themselves protection from lawsuits
According to Delaware Supreme Court Chief Justice Myron Steele, how should courts assess cases of improper corporate governance for limited liability entities?
By using contractual analysis of the partnership agreement
How are limited liability partnerships distinct from limited partnerships in some countries?
'Unlimited partner' requirement in limited partnerships
Which type of businesses is the LLP more suited for in countries where all investors wish to take an active role in management?
'Active management' businesses
In what way did some accountancy firms attempt to advance their interests according to the text?
Hiring government officials to enact legislation
Which entity suggested that limited liability entities should not be held to common law standards of fiduciary principles?
The Delaware Supreme Court Chief Justice Myron Steele
Test your knowledge about the characteristics and features of a limited liability partnership (LLP). Find out about the unique aspects of an LLP, including partner liability and protection.
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