A limited liability partnership (LLP) is basically a general partnership, but with the addition of giving the partners at least some limited personal liability. There is only one class of partner. The degree of liability limitation for an LLP varies from state to state. Some states provide a limitation of personal liability that is similar to a corporation. Some states only limit personal liability for the negligence of a partner. Some states take a middle ground, and limit personal liability for a partner’s negligence, as well as for partnership contracts and other debts. Because an LLP is a partnership, it must have two or more owners. A business partner is a co-owner of the business. A limited liability partnership is designed for businesses that usually operate as a traditional partnership. This tends to be accountancy firms, solicitors, dentists, veterinary practices, architects, chartered surveyors, medical practitioners and other professional services firms.
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.
Limited Liability Partnerships also have a pros and cons.
? Advantages of a Limited Liability Partnership
? The main advantage of an LLP is the limited personal liability provided to each of the partners. Generally speaking, each partner’s personal liability for another partner’s acts is limited to the partnership’s assets.
? Liability protection for all partners. The main advantage of an LLP is that all partners are protected by some form of liability protection, but this also means each partner gets a say in how the business is ran.
? Securities laws. Since all members of an LLP are considered general partners, security laws do not generally come into play when the members change ownership.
? Required by law. In some states, certain professions are not allowed to form other types of business structures, and are required by law to become a limited liability partnership.
? Disadvantages of a Limited Liability Partnership
? Multi-state considerations. Some states recognize LLPs formed in other states, and some do not. This could affect the limitation of liability in the other states.
? Liability protection. Although an LLP offers all members some form of liability protection, corporations and limited liability companies offer more comprehensive protections and are very popular with business owners.

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