Carol is a CPA who forms a partnership with another CPA, Pete. They form a limited liability partnership (LLP). If Carol negligently fails to correctly calculate a client's tax liability, resulting in fines to the client, what will be the outcome?

Carol is personally liable for her mistake, and not Dave. Carol was negligent while Dave was not negligent.

Explanation:

Limited liability partnerships offer the advantage of being able to structure the business as a general partnership but liability is not shared by the partners. This is very important specially for some specific trades like accounting, medicine, law, engineering, etc., were liability can be a very serious issue that ranges form small fines to hefty lawsuits.