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ACCA Applied Skills · Corporate and Business Law (Global) · Corporations and legal personality

Karim, Dalia and Omar are partners in a limited liability partnership (LLP) in a jurisdiction where LLPs are recognised by statute and have separate legal personality. The LLP defaults on a loan. Which statement is most accurate?

The lender can enforce the debt against the LLP, and members' liability is generally limited to their agreed contribution. An LLP has separate legal personality and can contract in its own name, though a member can still be personally liable for their own wrongful acts.

  1. AThe lender can enforce against the LLP, and the members' liability is generally limited to their agreed contribution, subject to any personal wrongdoingCorrect
  2. BThe lender can claim from each member personally without limit, exactly as with a general partnership
  3. CThe lender has no claim, because an LLP cannot enter into contracts in its own name

Explanation

An LLP is a separate legal person that can contract and be sued, and members generally have limited liability, though a member remains personally liable for their own negligent or wrongful acts. The second option describes a general partnership. The third contradicts separate personality.

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