The Introduction of Limited Liability Partnership in the New Commercial Code of Ethiopia
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Date
2025-01-01
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Addis Ababa University
Abstract
The limited liability partnership (LLP) is a relatively recent form of business organization that has gained legal recognition, setting it apart from more traditional structures. This particular entity is specifically reserved for use by certain professional individuals, such as lawyers, physicians, accountants, medical doctors and so on. The primary advantage of the LLP is that it offers a shielding of personal liability for its partners, limiting their exposure to the extent of their individual ownership share in the partnership.The primary objective of this research is to assess the clarity and adequacy of the legal framework governing LLPs. Key issues explored include the lack of specificity regarding the types of professionals eligible to establish LLPs, ambiguities in partner liability, and concerns over the fairness of cash payouts for departing partners. Additionally, the study addresses challenges in the decision-making process, particularly the implications of the two-thirds majority vote requirement in partnerships with only two members.This research employs a mixed-methods approach, combining doctrinal analysis of pertinent legal texts with qualitative interviews of legal experts and practitioners. The findings aim to pinpoint gaps in the existing regulatory framework and propose recommendations to improve the clarity and fairness of LLP provisions. Ultimately, this study aspires to deepen the understanding of LLPs in Ethiopia, offering valuable insights for policymakers, legal practitioners, and stakeholders navigating an evolving business landscape
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Limited Liability Partnership (LLP)