LLP Partner Duties Not the Same as in Normal PartnershipPrintPdfClose »

23/09/2011

The duties of a partner in a limited liability partnership (LLP) are not the same as those in an ‘ordinary’ partnership as regards the fiduciary duties owed to the other partners.

The reason for this is that an LLP is not a partnership in the traditional sense: it is an independent legal entity from the partners who are members of it.

Accordingly, the duties owed to the partners are not as onerous as those owed to the other partners in a normal partnership, as in that sort of partnership any partner can bind the others and make them jointly and severally liable for a transaction carried out in the normal course of business.

LLPs are a less risky business structure than partnerships for that reason. However, since the purpose of having an LLP is usually to protect the assets of the partners within it in the case of the insolvency of the partnership, they are often less easy to finance.

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