The Limited Liability Partnership (LLP)
An LLP is similar to a general partnership; however, in an LLP, each partner is not liable for the actions of other partners. If one partner dies, the LLP automatically ceases.
All partnerships have at least two people involved. In a limited partnership there are one or more general partners and one or more limited partners.
Limited partners have certain rights to the partnership's income and profits, but are not liable for company debts, liabilities, and other financial obligations.
- Advantages: LLPs do not need to have a board of directors or hold meetings. The LLP is not liable for taxes because income passes through to the partners, who are individually responsible for taxes. Partners are not liable for the actions of other partners.
- Disadvantages: Many states do not recognize LLPs and those that do often limit LLPs to professionals (i.e., lawyers, accountants, architects, etc).
