Asked by Sameeha Riptee on May 25, 2024
Verified
The major features of an LLP are that it limits the personal liability of the partners and
A) it allows the partnership to continue as a pass-through tax entity.
B) LLP statutes do not vary from state to state.
C) it can only do business in the state in which it was formed.
D) only a few states have enacted LLP statutes.
Limited Liability Partnerships (LLP)
A legal structure for businesses where partners' liabilities are limited to their investment in the company, protecting personal assets from business debts.
Personal Liability
Personal liability is an individual's legal responsibility to repay debt or fulfill obligations from personal assets if the business or venture they are involved in fails to meet these obligations.
Pass-Through Tax Entity
A business structure that avoids corporate tax, instead, profits and losses are passed through to the individual owners' tax returns.
- Identify the benefits of establishing a Limited Liability Partnership (LLP) and its impact on the liabilities of partners.
- Grasp the concept of pass-through tax entities and how it applies to LLPs.
Verified Answer
Learning Objectives
- Identify the benefits of establishing a Limited Liability Partnership (LLP) and its impact on the liabilities of partners.
- Grasp the concept of pass-through tax entities and how it applies to LLPs.
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