Which form limits each partner's personal liability for acts or omissions of other partners?

• A. Limited partnership
• B. Partnership
• C. Limited liability partnership
• D. Common name statute

Answer: (C)

An LLP is designed to shield partners from each other’s acts or omissions. In a general partnership, each partner can be held personally liable for the obligations of the partnership and the actions of the other partners, which means personal assets are at risk. A limited partnership splits risk between general partners (who have unlimited liability) and limited partners (whose liability is limited to their investment, and who typically don’t manage). The limited liability partnership, however, provides protection so that a partner isn’t personally liable for the negligent or wrongful acts of other partners; each partner is liable only for their own actions (and, in many cases, their own professional malpractice). This liability shield is what makes an LLP the form that best limits personal exposure to the acts of others within the firm. The common name statute relates to naming a business, not liability, and a general partnership does not provide protection against others’ acts.