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Limited Liability Partnership (LLP)
Practical Law Glossary Item 2-382-3584 (Approx. 2 pages)
Glossary
Limited Liability Partnership (LLP)
A form of partnership managed and operated by at least two people (the partners). Each partner generally benefits from a status-based limited liability shield that:
- Is similar to the shield enjoyed by corporate shareholders.
- Protects partners from being personally liable for the debts and obligations of the LLP. However, it has no effect on liability resulting from the partner's conduct. The nature and scope of the liability shield varies by state.
This is different from a limited partnership, which has one or more general partners with unlimited liability that manage the business and one or more limited partners with limited liability but typically no right to manage the business.
LLPs are governed by their state of formation's partnership statutes. Professionals such as accountants and lawyers usually establish their businesses as LLPs.