The following Corporate Q&A provides comprehensive and up to date legal information covering:
This question poses two different possible scenarios. The first is that a claim is being brought against a limited liability partnerships (LLP) in relation to a negligent act carried out by a member of the LLP. The second is that a claim is being brought against an LLP in relation to a negligent act carried out by an employee of the LLP. Each scenario is considered in turn.
The members of an LLP are its agents. If a member acts on behalf of the LLP in the ordinary course of business and within their authority, they will not be liable for the LLP’s negligence. This was a prime driver for the creation of the LLP as a new entity which enabled members to limit their personal liability in contrast to the substantial personal liability of partners of general partnerships. An LLP is a stand-alone entity, separate from its members, and has its own assets and liabilities.
However, an LLP member will not be immune from all liability by virtue of being an LLP member if, in fact, it is the LLP member’s wrongful acts or omissions that have caused damage by way of negligence, or if they have acted outside their authority. This is a similar principle to the liability of directors of limited companies; directors have limited liability but are not excluded
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