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A limited liability partnership (LLP) is a partnership in which some or all partners (depending on the jurisdiction) have limited liabilities. It therefore exhibits elements of partnerships and corporations. In an LLP, each partner is not responsible or liable for another partner’s misconduct or negligence.
Partnerships are the most common business structure for businesses that have more than one owner. Many businesses, ranging from retail stores to accounting firms, are structured as partnerships. A business partnership is a for-profit business established and run by two or more individuals. There can be any number of partners involved in the business, as long as there are at least two. A business partner is a co-owner of the business.
However, some types of partnership allow at least one owner limited personal liability for the business’ financial obligations, such as debts and court judgments. One common structure is the limited liability partnership, or LLP. A limited liability partnership is a newer form of business partnership where all of the owners have limited personal liability for the financial obligations of the business.
There are no general partners in a limited liability partnership, but an LLP is similar to a general partnership. Each limited liability partner contributes to the everyday business operations. However, each partner enjoys limited personal liability for the other partners’ acts. All states allow some form of LLP, though state laws vary. Note that some states only allow LLP status for professional partnerships, like accountants, lawyers or architects. In all states, limited liability partnerships can only be formed by registering with the appropriate state office.
Get a free consultation for Limited Liability Partnership Registration with filling and Business Setup in India by Schelling an appointment with an Adhimukti Associates Advisor.
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