LLP Quiz
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Questions and Answers

In a limited liability partnership (LLP), each partner is not responsible or liable for another partner's misconduct or negligence. This distinguishes an LLP from a traditional partnership under the UK Partnership Act 1890, in which each partner has:

  • Unlimited liability
  • Limited liability for all partners' actions
  • Joint (but not several) liability (correct)
  • Equal liability for all partners
  • In an LLP, some or all partners have a form of limited liability similar to that of the shareholders of a corporation. Depending on the jurisdiction, the limited liability may extend only to the negligence or misconduct of the other partners, and the partners may be personally liable for:

  • Other liabilities of the firm or partners (correct)
  • All liabilities of the firm
  • Limited liabilities of the firm
  • Negligence of the board of directors
  • In an LLP, the partners have the power to manage the business directly. In contrast, corporate shareholders must:

  • Be personally liable for all business operations
  • Elect a board of directors (correct)
  • Have joint liability for business decisions
  • Have limited control over business decisions
  • An LLP can exhibit aspects of both partnerships and corporations due to:

    <p>Limited liabilities of the partners</p> Signup and view all the answers

    Under the UK Partnership Act 1890, in a traditional partnership, each partner has joint (but not several) liability. This means that the partners are jointly liable for:

    <p>All obligations of the partnership</p> Signup and view all the answers

    What is a partnership?

    <p>A business agreement between two or more individuals to share ownership and responsibilities</p> Signup and view all the answers

    What distinguishes a corporation from a partnership?

    <p>Corporation is owned by shareholders and has specific legal rights and liabilities</p> Signup and view all the answers

    What are the risks and benefits assumed by business owners (partners) in a partnership?

    <p>Assume all risks of running the business and share all benefits</p> Signup and view all the answers

    What distinguishes a partnership from a corporation in terms of setup and obligations?

    <p>Partnership is easier to set up and has less paperwork, legal obligations, and tax requirements</p> Signup and view all the answers

    What do partners in a partnership share?

    <p>Ownership, responsibilities, profits, and liabilities</p> Signup and view all the answers

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