ACCA Applied Skills · Corporate and Business Law (Global) · Partnerships
Ivor and Jana operate a trading firm in a jurisdiction which allows a limited liability partnership (LLP) as a corporate-style entity. Which feature most accurately distinguishes an LLP from a general partnership?
An LLP has separate legal personality and gives its members limited liability, unlike a general partnership. An LLP is also created by registration, while a general partnership arises simply from conduct and has unlimited personal liability.
- AAn LLP has separate legal personality and its members normally have limited liability, whereas a general partnership lacks these in most jurisdictionsCorrect
- BAn LLP must have at least one member with unlimited liability, whereas a general partnership does not
- CAn LLP can be formed informally by conduct, whereas a general partnership requires registration
Explanation
An LLP is a registered body with its own legal personality and members whose liability is limited, whereas a general partnership usually has no separate personality and unlimited liability. Option B describes a limited partnership. Option C reverses the position: LLPs require registration, general partnerships do not.
Did you get it right without looking?
One question tells you little. A timed set on Partnerships shows your real accuracy, how long you take and where you lose marks.
More Partnerships questions
- Dunmore LLP is a limited liability partnership with four members. It owes a supplier $90,000 and cannot pay. Which statement best describes …
- A partnership is dissolved and its assets are realised. The firm's assets are insufficient to pay its creditors. Which statement about the p…
- Chen and Dalia are partners. Their partnership agreement is silent on how profits are shared. Chen contributed 80% of the capital and Dalia …
- Three friends, Chen, Dara and Eli, decide to run a bakery together to make a profit. They never sign a written document, but they trade unde…
- Which of the following is a key difference between an LLP and a limited partnership (LP) under the usual rules?
- Amara and Bao begin trading together as a general partnership selling furniture, intending to share profits. They have signed nothing and ha…