ACCA Applied Skills · Corporate and Business Law (Global) · Partnerships
Which of the following is a key difference between an LLP and a limited partnership (LP) under the usual rules?
The key difference is that an LLP has separate legal personality and all its members can have limited liability, while a limited partnership must include at least one general partner who has unlimited personal liability for the firm's debts.
- AAn LP has separate legal personality, whereas an LLP does not
- BAn LLP must have at least one member with unlimited liability, whereas an LP need not
- CAn LLP has separate legal personality and all members can have limited liability, whereas an LP must have at least one general partner with unlimited liabilityCorrect
- DThere is no difference because both are governed solely by the general law of partnership
Explanation
An LLP is a separate legal person in which all members can enjoy limited liability. A limited partnership must have at least one general partner with unlimited liability and, under the usual rules, does not have separate personality. The other options reverse or misstate these features.
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