Limited Liability Partnership Essay Example | Topics and Well Written Essays - 2250 words

limit Liability Partnership - Essay ExampleIn a general format of compact caper it is a legal practice that all partners have unlimited liabilities with respect to their business debts and if one soul is declared insolvent then the opposite partners are bound by law to contribute for his debts, loans and liabilities from their consume personal assets and property.Limited indebtedness on the other hand is non the same as other partnership concerns it differs a lot in the liability context from other partnership businesses. With respect to the liability clauses, it is to a greater extent resembling to the corporation. Limited liability means that partners have limited liabilities with respect to their debts and loans of the regular. One partner is not jointly and severally responsible for(p) for the actions and deeds of other partners and that his personal assets forget not be employ to pay for the liabilities of the firm or other partners. Therefore, both partner in the p artnership firm will have limited liability towards the liabilities of the firm and other partners in the firm as well. This is very such(prenominal) same to the limited liability phoner in which every member of the company is responsible to pay for the liabilities of the company to the extent he has invested into the company. Therefore, a limited liability partnership can be define in the following wordsThepartneror investors liabilityislimitedto theamounthe/she has invested in thecompany. Thissetuptypically prevents each partner from beingheldaccountablefor the defectivedoings of another partner. Although an LLP can be utilize in manyfields, it is most commonly used inlawor accountingfirms. The laws relating to an LLP differ significantly betweencountries, and even from state to state.As the explanation states that the liability of the partner or investor is limited to the extent of amount he or she has invested in the firm and that this type of partnership prevents one part ner for being held responsible for the work of other partners. It is also say that this partnership can be used in many fields but this sort of partnership is particularly important for professional firms. In professional firms as the size of the firm started to grow and more and more partners were needed to perform the work in the firm, there was a great threat of unneeded ordinary risk involved in the addition of other partners in the partnership firm where every partner is an agent of other partners and jointly and severally responsible for the work of other partners. Therefore, there is judgement to be dire need of forming limited liability partnerships in the professional firms where matters relating to high financial value are very important to the firm and the firms professional advice is being given relating to those high valued matters. If anything goes wrong due to the recklessness of one partner then other partner should not be held responsible for the wrong doings of that partner. The requirements for the formation and conduction of business as a limited liability company as mentioned in the law of United Kingdom under the respective acts are described in the following paragraphs.Set-UpThe set up requirements as mentioned in t