National Occupational Competency Testing Institute (NOCTI) Business Practice Exam

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What defines a limited liability limited partnership?

It has no general partners
It includes a statement in its certificate to become an LLLP
It operates without protection from claims
It is just another term for a sole proprietorship

The correct answer is: It includes a statement in its certificate to become an LLLP

A limited liability limited partnership (LLLP) is characterized by its inclusion of a specific statement in its certificate that designates it as such. This formal declaration is crucial as it outlines the structure and legal status of the partnership, ensuring that all partners understand the limited liability arrangements. In an LLLP, general partners have limited liability protection, much like limited partners. This offers an additional layer of security against claims, differentiating it from traditional limited partnerships where general partners can still be fully liable. Moreover, the features that define an LLLP, such as limited liability for general partners, hinge on this official designation in the partnership's certificate. Therefore, having that statement is essential to formally establish the partnership as a limited liability limited partnership, which is what makes this choice the correct answer.