Define: Limited Liability Partnership

An LLP is a type of business structure that combines the limited liability protection of a corporation with the tax benefits of a partnership.

In an LLP, partners are not personally liable for the debts and obligations of the partnership, whereas in a general partnership, partners have unlimited personal liability.

To form an LLP, partners must file a registration with the appropriate state agency and comply with any specific requirements set forth by the state’s LLP laws.

The main advantage of forming an LLP is the limited liability protection it provides to partners, as well as the flexibility in management and tax benefits.

One potential disadvantage of an LLP is the complexity of formation and ongoing compliance requirements, as well as the potential for disputes among partners.

No, an LLP requires at least two partners to be formed.

Yes, an LLP can be converted to a different business structure, such as a corporation or a limited liability company (LLC), by following the specific conversion process outlined by the state’s laws.

Some states have restrictions on the types of businesses that can form an LLP, such as professional service providers like lawyers, accountants, and architects.

LLPs are typically taxed as pass-through entities, meaning that the profits and losses are passed through to the partners and reported on their individual tax returns.

In most cases, partners in an LLP are not personally liable for the actions of other partners, unless they have personally guaranteed the obligations of the partnership.