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Limited liability partnership

From Academic Kids

Limited liability partnerships (LLP) are a form of business organization. In the United States, each individual state has its own law governing their formation. They are a sub-group of partnerships. In a Limited Liability Partnership, each partner is fully liable for the debts of the partnership, but not for acts of professional negligence or malpractice committed by the other partners.

This type of organization is most popular among professionals, particularly lawyers and accountants. Each partner can be held jointly and severally liable for the ordinary business debts of the company, but if one partner commits an act of professional malpractice in the course of the partnership's business, that partner alone is liable to the injured party. For ordinary debts, every partner is fully liable even to the extent of their personal property.

Note: "Limited liability partnership" has different detailed legal implications in different jurisdictions. An LLP is a different form of business organization than an ordinary partnership, a limited partnership, or a limited liability limited partnership.

LLC v. LLP

A limited liability partnership (LLP) differs from a limited liability company (LLC) in that the members of an LLP are liable for the debts of the partnership, but in an LLC, each member is only liable to the extent of their investment in the company. Both entities are taxed as partnerships, avoiding the problem of "double taxation" often found in corporations.

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