Assesing The Legal Framework Of Limited Liability Partnership (Llp) In Current Commercial Code Of Ethiopia:- Crtical Analysis With Foreign Experiences

Abstract

A limited liability partnership is an alternative corporate business form that gives the benefit of limited liability of a partnership and the flexibility of a partnership. It can continue in existence, irrespective of the changes of the partner’s. Further, no partner is liable on account of the independent or unauthorized actions of other partners; thus, individual partners are shielded from joint liability created by another partner’s wrongful and misconduct professional services rendered. This study assesses the implication of foreign experience of limited liability partnerships with newly adopting limited liability partnerships in Ethiopia. In the critical analysis of LLP with foreign experience, evaluate the loopholes and challenges of implementation in the legal regime of Ethiopia. Critical shortcoming legal regimes in Ethiopia fill an inherent legal gap between partnerships and companies registered under the Commercial Code. In the absence of a suitable legal environment for professionals’ services, the number of unincorporated businesses is increasing. In consequence, there exists a disparity between the rates of incorporation vis-à-vis growth in limited liability partnerships. With increasing growth in Ethiopia’s commercial landscape, there exists a need to have a new business entity form that has the flexibility of a partnership alongside maintaining the benefits of a company. The inherent gap of partnership in Ethiopia and the recent development of the LLP legal framework are analyzed with those jurisdictions that have adopted LLPs and assessed in the manner in which LLPs are to be implemented in the new Ethiopia’s corporate system. Consequently, the general concept of LLP is scrutinized, compared, and evaluated to ensure its application in the Ethiopian legal system.