LIMITED LIABILITY PARTNERSHIP
What Is A Limited Liability Partnership?
Small business owners sometimes choose the organizational form of a limited liability partnership (LLP) for their business. An LLP is a type of general partnership that provides its general partners with limited liability for certain obligations of the partnership. It has the benefits of a partnership and limitations on liabilities. A Limited Liability Partnership is a partnership that limits the exposure of general partners to certain kinds of partnership liabilities. The characteristic that the LLP shares with the corporation is limited liability. Under the typical LLP law, a general partner in an LLP:
- Is not liable for the debts and obligations of the LLP arising from errors, negligence, wrongful acts, or misconduct committed in the course of the partnership's business by another partner or by an employee, agent, or representative of the LLP
- Is liable for the general obligations of the partnership
- Is liable for obligations arising from his or her own misconduct, and for obligations arising from the misconduct of a person over which he or she has direct supervision and control
- May be liable when the partner had notice or knowledge of misconduct by another partner or representative
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