WHAT is true for a limited liability partnership?

Answer 1

The partner with unlimited liability is generally the initial person who started the partnership and owns the majority of the company.

Unlimited liability means if the company fails, files for bankruptcy and you owe debts; then your personal assets can be seized such as your home, car, contents of your bank accounts to pay off the debts.

The other partner(s) are only liable for their investment in the company.

Answer 2

At the basest level (Written or unwritten, simply a handshake agreement, or even an implied partnership) you would be operating as a "General Partnership". General Partnerships have no limits on the potential liability, you are personally responsible for your own debt, and the debts of the partnership and the partnership is responsible for all debts of all the partners, so you become liable for all the personal debts of all your partners.

There is a subset of partnership arrangements known as Limited Partnerships, if you comply with all the formalities and structure it properly, a limited partnership can create 2 classes of partners: Limited Partners and General Partners. General Partners are still 100% liable for all debts. But in theory the limited partners are not liable.

In practice the lines can blur. It is not title, but action that determines if you are a "General" or "Limited" partner. If you have an active participation in the management of the partnership you are a general partner.

Over the last 20-30 years the courts have demonstrated that reliance on a limited partnership to preserve assets, or to limit liability, is misplaced faith.

Answer 3

The capital of the partnership are partner and the liability is unlimited for that purpose all partners performs their duties well and proper manner. If they not perform their duty properly and any loss occurred then the personal property may be used.

Answer 4

Limited liability is a type of liability that cannot exceed the amount that has been invested in a partnership or limited liability company. Limited liability protects personal assets from the risk of being seized to satisfy creditor's claims, debts and other obligations. For privately or publicly held corporations, a shareholder's responsibility for the company's debts is limited to the par value of paid up shares. The company itself as a legal entity is liable for the rest.

Answer 5

General partner has unlimited liability since the general partner is in charge and makes decisions for the partnership.