It is possible to create partnerships in which a partner has only limited liability. Is such...

It is possible to create partnerships in which a partner has only limited liability. Is such an arrangement consistent with partnership law? Or, should the advantages of a limited partner be extended to all partners?

Expert Solution

Partnership: Apartnership firm is an organisation in which 2 or more persons are formed to earn a profit. In general, the partners of the partnership are responsible for the debts of the firm jointly

Limited Libaility Partnership: Limited Liability partnership is the partnership where some or all the partners have limited liabilities upto the amount invested. Each partner is not liable for each others miscounduct.

In some countries Limited Liability Paartnership is different from Limited Partnership. In LImited Partnership there should be atleast one general partner who is actively participating in the day to day activities of the business and being liable for the acts of the business while the other partners being passive with limited liability.

So, A partnership can be created in which a partner being passive with limited liability and such agreemnet is consistent with the partnershi law as said above. Depending upon the country and jurisdiction in which the partnersip is operating, the advantages of limited partner can be extended to all partners with limited liability.

According to U.K's Partnership Act, the members of teh limited liability partnership have a joint responsibility to the extent they have agrreed in the Limited Liability PArtnership agreemen, but no individual responsibility for eaxh others action.

In U.S. the liabilities of the partners differs from state to state

ekkarill92 answered 1 year ago

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