Identify the correct statement about a limited liability partnership (LLP).
A)The controller of a limited liability partnership is responsible for the negligence and irresponsibility of the general partners.
B)A limited partner of a limited liability partnership is responsible for the general management of the partnership business.
C)A limited 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 of a limited liability partnership is responsible for the negligence and irresponsibility of all general partners.

Question

Identify the correct statement about a limited liability partnership (LLP). 
A)The controller of a limited liability partnership is responsible for the negligence and irresponsibility of the general partners.
B)A limited partner of a limited liability partnership is responsible for the general management of the partnership business.
C)A limited 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 of a limited liability partnership is responsible for the negligence and irresponsibility of all general partners.

Quizplus · Accepted Answer

In a limited liability partnership, the general partners are responsible for the management of the partnership and are personally liable for any debts or obligations incurred by the partnership, while the limited partners have no such management responsibilities and are usually only liable to the extent of their investment in the partnership. Therefore, option D is the correct statement as it states that a general partner of an LLP is personally liable for all business debts. Option A and E are incorrect as they state that the controller and limited partner are responsible for the negligence and irresponsibility of the general partners, respectively. Option B is incorrect as it states that a limited partner is responsible for general management, which is actually the responsibility of the general partners. Option C is also incorrect as it is not true that a limited partner is liable to pay tax on all partnership income.

Identify the Correct Statement About a Limited Liability Partnership (LLP)