Section A

Which of the following is a characteristic of a Limited Liability Partnership (LLP)?

Answer options:

It is governed by the Partnership Act 1890.

Its members have unlimited liability for the debts of the business.

It is a separate legal entity from its members.

It cannot grant floating charges over its assets.

How to approach this question

Compare an LLP to a traditional partnership and a limited company. Identify its corporate characteristics.

Full Answer

C.It is a separate legal entity from its members.✓ Correct

A Limited Liability Partnership (LLP) is a distinct legal entity separate from its members (body corporate). This means it can hold property, enter into contracts, and grant floating charges in its own name, while offering its members limited liability.

Common mistakes

Confusing an LLP with a traditional partnership or a limited partnership.

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Practice the full ACCA LW — Corporate and Business Law Practice Exam 6

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