MBE Rules · Business Associations
Limited Liability Partnerships
Cal. Corp. Code § 16951
The rule
California LLPs are restricted to licensed professions (law, accounting, architecture, engineering, land surveying); registration shields partners from vicarious liability while personal malpractice liability remains.
In plain English
In California, Limited Liability Partnerships (LLPs) are only available to certain licensed professions, such as law and accounting. While LLPs protect partners from being held responsible for each other's negligent acts, they do not shield partners from liability for their own professional misconduct.
Worked example
Two accountants form an LLP in California. One partner commits malpractice by providing incorrect financial advice, leading to a client's loss. The LLP protects the other partner from being liable for the malpractice, but the negligent partner is still personally liable for their actions.
Memory hook
LLPs: Protect your partners, but not your own mistakes.
The trap
Exams often include scenarios where students confuse the liability protections of an LLP with those of other business entities, leading to incorrect conclusions about personal liability.
How examiners test it
Questions typically present a fact pattern involving a professional service gone wrong, testing the candidate's understanding of the limits of LLP liability.
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