LAW OF BUSINESS ORGANIZATIONS

ASSIGNMENT

DIFFERENCE BETWEEN LIABILITIES OF PARTNERS IN GENERAL PARTNERSHIP AND

LIMITED LIABILITY PARTNERSHIP

SUBMITTED TO

Respected Madam Warda Tahir

SUBMITTED BY

AWAIS ALI

ROLL NO

BL - 0244

SHAHEED ZULFIQAR ALI BHUTTO UNIVERSITY OF LAW, KARACHI

DIFFERENCE BETWEEN LIABILITIES OF PARTNERS IN GENERAL
PARTNERSHIP AND LIMITED LIABILITY PARTNERSHIP:
General partnership:

In the beginning first of all what is general partnership? General partnership

is a type of partnership in which partners have unlimited liability in the contribution of decision
making for company. In the general partnership the partners pay unlimited debt for company
(depending to their financial position) if the company is in loss. In general partnership
registration for the company is not required however, partners can start business instantly at
the first transaction.

Limited Liability Partnership LLP:

The limited liability partnership is a type of partnership in which the liabilities

and powers of partners are limited in the company and their contribution over the firm is also
limited.

Limited liability partnership is just like general partnership not there is necessary for the
partners to register company in limited liability partnership. However, limited liability
partnership is incorporated that it assures the legal support if any other partner does anything
against the law. In limited liability partnership, the partners are individually liable for any
fraudulent act.

DIFFERENCE BETWEEN THE LIABILITIES OF PARTNERS IN GENERAL PARTERSHIP ANDD LIMITED

LIABILITY PARTNERSHIP:

1. Liability in act done against the law:

However in general partnerships the firm is liable for the act done while in limited
liability partnership the partners are individually liable.

2. Liability over business:

It is up to the partners to run the business, usually by way of a partnership agreement. Each
partner’s share of the profits is taken as personal income. The main thing is that partners each
have unlimited liability for the debts and obligations of the partnership and the actions of the
other partners in the partnership’s business. While limited liability partnership, is a separate
legal entity and so partners are not liable for its debts and obligations unless they have
specifically accepted personal liability, a partnership agreement will usually set out how the
partnership is operated.
3. Control over business:

In general partnership the partners have full control over business they
have choice to make decisions for the firm, whereas, in limited liability partnership, the
partners don’t have enough power to form decisions which can form legal binding in the firm.

4. Payment of debts:

In general partnership, the partner’s personal assets can be used to pay debts
while in limited liability partnership, personal assets of partners are not used to pay the debt as
their liability over business is limited.