Fred Adzum, CPA and Bill Subtraxem, CPA formed the accounting firm Adzum & Subtraxem, LLP. A former client of Fred's is suing Fred and the firm for accounting malpractice. If the former client is successful in his lawsuit, and Fred is found to have committed malpractice, what could this mean to the personal assets of Fred and Bill?
A. Both Fred and Bill would be personally liable, jointly and severally.
B. Fred would be personally liable due to his conduct; Bill may lose his capital contribution to the firm, but his personal assets would be shielded.
C. As the firm is an LLP, the personal assets of both Bill and Fred would be shielded.
D. Fred would be personally liable due to his conduct; both Bill's capital contribution to the firm and his personal assets would be shielded.
Answer: B
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