Cathy and Denise open a business as a limited liability partnership in a state that offers "partialshield" protection. From this scenario, it can be concluded that Cathy:
A) has unlimited liability for debts the firm incurs but is protected from debts that result from Denise's negligence.
B) is protected from debts that arise from her own negligence but has unlimited liability for any other business debts.
C) may lose any money she initially invests in the company but has no further liability.
D) will split responsibility for company debts evenly with Denise, so she cannot be held responsible for more than 50 percent of claims against their business.

Question

Cathy and Denise open a business as a limited liability partnership in a state that offers "partial­shield" protection. From this scenario, it can be concluded that Cathy:
A) has unlimited liability for debts the firm incurs but is protected from debts that result from Denise's negligence.
B) is protected from debts that arise from her own negligence but has unlimited liability for any other business debts.
C) may lose any money she initially invests in the company but has no further liability.
D) will split responsibility for company debts evenly with Denise, so she cannot be held responsible for more than 50 percent of claims against their business.

Quizplus · Accepted Answer

In a "partial-shield" limited liability partnership, partners have protection from personal liability for the negligence or misconduct of other partners, but they may still have unlimited liability for other business debts.

Cathy and Denise Open a Business as a Limited Liability