Which of the following statements is true of limited liability partnerships (LLP)?
A) All the partners lose only their capital contribution in the LLP if the LLP fails.
B) The limited partners are personally liable for the debts and obligations of the LLP.
C) A limited partner whose negligent or intentional conduct causes injury cannot be held personally liable for his or her conduct.
D) If an LLP fails, the LLP's remaining assets are sold to help the largest stakeholder recover his or her investments in the LLP.

Question

Quizplus · Accepted Answer

In a limited liability partnership (LLP), all partners have limited liability and are only at risk of losing the amount of capital they have contributed to the partnership. This means that if the LLP fails, the partners are not personally responsible for any additional debt or liability beyond their capital contribution. Option B is incorrect as limited partners are not personally liable for the debts and obligations of the LLP. Option C is also incorrect as partners who engage in negligent or intentional conduct can still be held liable for their actions, although their liability may be limited to their capital contribution. Option D is also incorrect as the remaining assets of the LLP would be used to pay off any debts and obligations before any remaining funds are distributed to stakeholders. The largest stakeholder would not necessarily be the only one to recover their investments in the LLP.

Which of the Following Statements Is True of Limited Liability