In an LLP, the liability of partners is:a.Limited to their capital contributionb.Limited to their share of profitsc.Unlimited and jointd.Unlimited but several

Step 1: Break Down the Problem

The question asks about the nature of liability in a Limited Liability Partnership (LLP) and provides four options. We need to evaluate each option to find the correct statement regarding the liability of partners in an LLP.

Step 2: Relevant Concepts

1. Limited Liability: In an LLP, partners generally have limited liabilities, meaning that their personal assets are protected from the debts of the business.
2. Capital Contribution: This refers to the amount that partners invest in the partnership.
3. Share of Profits: This indicates how profits are distributed among partners based on their agreement.

Step 3: Analysis and Detail

• Option a: "Limited to their capital contribution" - This is typically true for LLPs. Partners cannot lose more than what they invested.
• Option b: "Limited to their share of profits" - This does not accurately describe liability, as it is their investment that determines the risk, not profit sharing.
• Option c: "Unlimited and joint" - This is incorrect for LLPs, as partners enjoy limited liability.
• Option d: "Unlimited but several" - This implies that partners have personal liability for their own actions, but this does not reflect the general rule in LLPs.

Step 4: Verify and Summarize

Upon reviewing the options, the correct interpretation of liability within an LLP leads us to select option a. Partners’ liabilities are indeed limited to their capital contributions, which protects their personal assets.

Final Answer

The liability of partners in an LLP is: a. Limited to their capital contribution.