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Secondly, an LLP is very different from a general partnership or a limited partnership (“LP”) in existence. The LLP is essentially a general partnership in form and is therefore similar to an ordinary partnership in that a number of individuals or limited companies share in the risks, costs, responsibilities and profits of the business. However, there is an important difference between them. In a general partnership, individual partners are liable for the partnership’s debts and obligations, but an LLP provides each of its individual partners protection against personal liability for certain partnership liabilities, i.e. the liability is limited to the amount of money they have invested in the business and to any personal guarantees they have given to raise finance. Meantime, LLPs are distinct from LPs, because limited liability is granted to all partners, not to a subset of non-managing "limited partners".
Thirdly, it is a global trend to introduce LLPs, just like the introduction of the single shareholder companies. The LLP has been proven to be so popular in many other jurisdictions in resent years. The LLP first emerged in the US in early 1990s in Texas and expanded to many other states ever since . Then the UK followed . In Asian countries, LLPs are introduced in Japan , the PRC , and etc. Singaporeand Malaysia also purpose to legislate to allow LLPs. The introduction of LLPs will enhance the business legal infrastructure, which would help attracting more foreign businesses. Therefore, it is very important for Hong Kong to react to the competitive threat in order to prevent the potential risk of losing transactions and services under the competition of other regions, which will otherwise seriously strike the status of Hong Kong as one of the international economic and financial centers.
The fourth, it is feasible to introduce the LLP in specific professionals first. The special needs of specific professionals ought to be considered. In some foreign regions, e.g. New York, the LLP statute restricts eligibility solely to partnerships that render professional services. Globally speaking, the LLP is typically available to attorneys, physicians, architects, dentists, engineers, and accountants. Hong Kong can first introduce LLPs to such special professionals as attorneys, accountants, and etc. After that it can be extended to other business fields step by step. This is not of anything unfairness or irrationality as the government said, it is but one of the stages in the developing process.
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