In Alberta, professionals conduct their trades through professional corporations, which do not entitle these professionals to the same types of limited liability protection enjoyed by shareholders in traditional business corporations. The issue this report considers is whether certain professions, which are currently required to practice in unlimited liability firms (such as accounting, legal, and health care), should be allowed to practice through limited liability firms. This report recommends that these professions, and all others, be given this option. In the United States, almost every state has enacted legislation permitting some sort of limited liability partnership (LLP). This new practice vehicle provides that while the firm will still retain responsibility for wrongful acts or omissions, only the actual individuals responsible are personally liable, while other partners or members of the firm are not. This report found that any adverse effect of limited liability on service quality provided to clients is likely to be negligible, and, when appropriate insurance requirements are levied, that limited liability will not produce an inappropriate allocation of risk between LLP members and the wronged party. Additionally, the report submits that LLP members be held to similar standards to those which directors of a traditional corporations are held, particularly regarding special liabilities like wage claims, and restrictions on firm asset distribution.
Final Report
Back to Publication SearchLimited Liability Partnerships, Final Report 77
Resource Details
Publication No: | 77 |
FORMAT: | Publications |
TAGS: | limited, professional, malpractice, liability, negligence, personal, Practice |
FILE: | fr077.pdf |