Unsourced material may be challenged and removed. In an LLP, each partner is not responsible or liable for another partner’s misconduct or negligence. In some countries, an Features of partnership pdf must also have at least one person known as a “general partner” who has unlimited liability of the company.
Unlike corporate shareholders, the partners have the right to manage the business directly. In contrast, corporate shareholders have to elect a board of directors under the laws of various state charters. A LLP also contains a different level of tax liability from that of a corporation. LLP partners to have limited liability, while a limited partnership may require at least one unlimited partner and allow others to assume the role of a passive and limited liability investor. As a result, in these countries, the LLP is more suited for businesses in which all investors wish to take an active role in management. There is considerable confusion between LLPs as constituted in the U.
UK LLP is, despite its name, specifically legislated as a corporate body rather than as a partnership. In Nigeria, limited liability partnerships have legal personality. However, one must register a partnership first before it can gain the status of limited liability partnership. In Kenya, limited liability partnerships similarly have legal personality distinct from its member partners. The liability of the partners is limited to any amount that may remain unpaid over the capital of the partnership. However, partners may be deemed liable for omissions or actions done by themselves if they lacked the relevant authority from the partnership or the affected party knew that such partner lacked authority or had no reason to believe that such person was a partner in the partnership. Registration is what vests such legal personality upon the entity.