Identify a true statement about a limited liability partnership (LLP).
A) A general partner of a limited liability partnership is responsible for the negligence and irresponsibility of limited partners.
B) A limited partner of a limited liability partnership is responsible for the general management of the partnership business.
C) A general partner of a limited liability partnership is liable to pay tax on all the partnership income.
D) A general partner of a limited liability partnership is personally liable for all business debts.
E) A limited partner responsible for the negligence and irresponsibility of general partners.

Question

Quizplus · Accepted Answer

A limited liability partnership (LLP) provides limited liability protection to all partners, including general partners. However, unlike a general partnership, a general partner in an LLP is not personally liable for all business debts. Instead, the general partner's liability is limited to his or her own negligence or wrongful acts, and the liability of limited partners is limited to their investment in the partnership. Additionally, all partners in an LLP are responsible for the management of the partnership business, not just the limited partners. Finally, a general partner is not personally liable to pay tax on all partnership income, as the partnership itself is a separate tax entity responsible for paying taxes on its income.

Identify a True Statement About a Limited Liability Partnership (LLP)