A limited liability partnership (LLP) is a partnership in which some or all partners (depending on the jurisdiction) have limited liability. It therefore exhibits elements of partnerships and corporations. In an LLP, one partner is not responsible or liable for another partner's misconduct or negligence. This is an important difference from that of an unlimited partnership. In an LLP, some partners have a form of limited liability similar to that of the shareholders of a corporation. In some countries, an LLP must also have at least one "general partner" with unlimited liability. Unlike corporate shareholders, the partners have the right to manage the business directly. In contrast, corporate shareholders have to elect a board of directors under the laws of various state charters. The board organizes itself (also under the laws of the various state charters) and hires corporate officers who then have as "corporate" individuals the legal responsibility to manage the corporation in the corporation's best interest. An LLP also contains a different level of tax liability from that of a corporation.
Limited liability partnerships are distinct from limited partnerships in some countries, which may allow all LLP partners to have limited liability, while a limited partnership may require at least one unlimited partner and allow others to assume the role of a passive and limited liability investor. As a result, in these countries, the LLP is more suited for businesses where all investors wish to take an active role in management.
There is considerable confusion between LLPs as constituted in the U.S. and that introduced in the UK in 2001 and adopted elsewhere — see below — since the UK LLP is, despite the name, specifically legislated as a Corporate body rather than a Partnership.
Read more about Limited Liability Partnership: National Variations
Famous quotes containing the words limited and/or partnership:
“There was a time when the average reader read a novel simply for the moral he could get out of it, and however naïve that may have been, it was a good deal less naïve than some of the limited objectives he has now. Today novels are considered to be entirely concerned with the social or economic or psychological forces that they will by necessity exhibit, or with those details of daily life that are for the good novelist only means to some deeper end.”
—Flannery O’Connor (1925–1964)
“Nevertheless, no school can work well for children if parents and teachers do not act in partnership on behalf of the children’s best interests. Parents have every right to understand what is happening to their children at school, and teachers have the responsibility to share that information without prejudicial judgment.... Such communication, which can only be in a child’s interest, is not possible without mutual trust between parent and teacher.”
—Dorothy H. Cohen (20th century)