What is a primary benefit of forming a Limited Liability Partnership (LLP)?
Practice Questions
1 question
Q1
What is a primary benefit of forming a Limited Liability Partnership (LLP)?
Unlimited liability for partners
Limited liability for all partners
No formal agreement required
Taxed as a corporation
A primary benefit of an LLP is that it provides limited liability protection to all partners.
Questions & Step-by-step Solutions
1 item
Q
Q: What is a primary benefit of forming a Limited Liability Partnership (LLP)?
Solution: A primary benefit of an LLP is that it provides limited liability protection to all partners.
Steps: 4
Step 1: Understand what a Limited Liability Partnership (LLP) is. It is a type of business structure where two or more partners manage the business together.
Step 2: Learn about limited liability protection. This means that the personal assets of the partners are protected from the business's debts and liabilities.
Step 3: Recognize that in an LLP, all partners have this protection, unlike in some other business structures where only some partners may have limited liability.
Step 4: Conclude that the primary benefit of forming an LLP is that it helps protect all partners from losing their personal belongings if the business faces financial trouble.
