Multiple choice

Which among the following are some of the main features of a 'Limited Liability Partnership'?

  1. The partners have the right to manage the business directly.
  2. Minimum 2 partners are required and there is no limit on maximum.
  3. It encourages smaller business entities to undertake larger ventures.

  1. 1 and 2

  2. 1 and 3

  3. 2 and 3

  4. 1, 2 and 3
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Limited Liability Partnership is a partnership in which some or all partners (depending on the jurisdiction) have limited liability. It therefore exhibits elements of partnerships and corporations. In an LLP one partner is not responsible or liable for another partner's misconduct or negligence. In an LLP, some partners have a form of limited liability similar to that of the shareholders of a corporation. Some of its major benefits are:

1. The partners have the right to manage the business directly.
2. Minimum of 2 partners and no limit on maximum.
3. Encourages smaller business entities to undertake larger ventures.
Hence, all the three statements are correct.

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