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:
Partnership:

Partnership is an association of the two or more people to carry a business. It can

be of two types General Partnership and limited liability partnership.

General Partnership (Introduction):

General partnership is an unincorporated firm created by a group of people

through an agreement. General partnership has unlimited liability over business however the
partners are jointly and severally liable for the loss.

Moreover, registration of the firm is not required/mandatory but registering the firm will be
fruitful for the partners to enjoy legal support.

Limited liability Partnership (Introduction):

Limited liability partnership is quite clear from its name”Limited”. It

is limited in nature. Limited liability partnership is a type of partnership in which the partners
have limited liability over the obligations towards the firm.

Limited liability partnership is a separate legal entity therefore it is totally separate from its
partners and that is why the LLP is not dissolved if any of the partners leaves the LLP.

DIFFERENCE BETWEEN THE LIABILITIES OF PARTNERS IN GENERAL PARTERSHIP ANDD LIMITED

LIABILITY PARTNERSHIP:

1. General Partnership:

I. Partners are jointly and severally liable for the act done by any partners.
II. Partners have unlimited liability over firm.
III. Partners can pay debts to make the loss good for the firm.
IV. In general partnership the partners have full control over business.
V. If a partner in general partnership receives the money from anyone, it will be
considered that the firm has received the money and if a partner misapplies the money
the firm will make the loss good. (Section 27 of the Partnership Act).
VI. On dissolution of firm, the partners will finish the unfinished transaction and the loss
will be paid by the firm and by the partners individually if necessary.
2. Limited liability Partnership (LLP):

I. Partners are individually liable for the act done by them. Therefore the partners are
protected from the act done by other partners.
II. Limited liability partnership is limited therefore the partner’s liabilities and obligations
are limited as well.
III. In limited liability partnership the partners do not have full access to control the
business however their liability is limited towards partnership.
IV. In limited liability partnership the personal assets of the partner are not used to pay the
transaction/debts of the partnership.
V. If a partner runs business alone (without any other partner) for more than six months,
he will be alone liable for the obligation.
VI. Partners are considered as the agent of LLP.

CONCLUSION:
Winding up all over discussion, we came to the conclusion that, the partnership
is an organization of two or more people which is constituted by an agreement. Partnership can
be of two type General partnership and limited liability partnership. General Partnership is an
unincorporated partnership which is basically an unlimited in its nature and partners in general
partnership enjoy unlimited liability which is a disadvantage as well. On the other hand there is
limited liability partnership in which the partners are themselves liable for the act done by
them and it is totally separate legal entity.