The correct answer is C. Both 1 and 2.
A limited liability partnership (LLP) is a business structure that combines the limited liability of a corporation with the flexibility and tax advantages of a partnership. In an LLP, each partner is personally liable for the debts and obligations of the partnership, but only to the extent of their investment in the partnership. This means that an LLP partner’s personal assets are not at risk if the partnership fails.
LLPs are a relatively new type of business structure, and they have become increasingly popular in recent years. This is because they offer a number of advantages over traditional partnerships and corporations. For example, LLPs are easier to form and maintain than corporations, and they offer greater flexibility in terms of how they are managed.
However, there are also some disadvantages to LLPs. For example, LLPs are subject to more regulation than traditional partnerships, and they may be more expensive to form and maintain. Additionally, LLPs may not be suitable for all types of businesses.
Overall, LLPs offer a number of advantages over traditional partnerships and corporations. However, there are also some disadvantages to LLPs that businesses should consider before forming one.
Statement 1 is correct because an LLP provides an alternative to the traditional partnership with unlimited personal liability on the one hand and the statue based company on the other. In an LLP, each partner is personally liable for the debts and obligations of the partnership, but only to the extent of their investment in the partnership. This means that an LLP partner’s personal assets are not at risk if the partnership fails.
Statement 2 is also correct because unlike company, it does not allow individual partners to be protected from the joint and several liabilities of partners in a partnership firm. In an LLP, each partner is personally liable for the debts and obligations of the partnership, but only to the extent of their investment in the partnership. This means that an LLP partner’s personal assets are not at risk if the partnership fails. However, if a partner breaches their duty of care to the partnership, they may be personally liable for the resulting losses.