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What Is a Limited Liability Partnership? - Definition, Advantages & Disadvantages

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

A limited liability partnership is where:

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1. The main difference between a general partnership and a limited liability partnership is:

2. Ernie and Ellis are partners in an engineering firm. They have a limited liability partnership. Each invested $20,000 to start the firm. Ernie recently gave bad advice that resulted in a large office building being built on a known land fault. The engineering firm was sued and now has to pay a $1,000,000 court judgment. Ernie can be held personally liable for:

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About This Quiz & Worksheet

In this quiz/worksheet combo you will be tested on the definition, advantages and disadvantages of a limited liability partnership as opposed to a general partnership. Through examples you will demonstrate your knowledge of how liability is assigned to each partner in this type of partnership.

Quiz & Worksheet Goals

In this assessment you'll be tested on:

  • The definition of a limited liability partnership
  • The differences between a limited liability and a general partnership
  • The relative liability of partners in a limited liability partnership
  • How a limited liability partnership is formed

Skills Practiced

  • Making connections - use your understanding of the concept of limited liability and general partnerships.
  • Problem solving - use acquired knowledge to solve practice problems that explore the liability assigned to partners in a limited liability partnership.
  • Defining key concepts - ensure that you can accurately define main phrases such as business partnership, and general and limited liability partnership.
  • Knowledge application - use your knowledge to answer questions about liability in limited liability partnerships.

Additional Learning

To learn more about limited liability partnerships, review the accompanying lesson, What is a Limited Liability Partnership? - Definition, Advantages & Disadvantages. This lesson covers:

  • The definition of a business partnership as opposed to a one-owner for profit business
  • The advantages of a limited liability partnership
  • The disadvantages of a limited liability partnership
  • An exploration through examples of the limits of responsibility and liability for the partners in a limited liability partnership
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