limited liability partnership

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Limited Liability Partnership

A form of general partnership that provides an individual partner protection against personal liability for certain partnership obligations.

The Limited Liability Partnership (LLP) is essentially a general partnership in form, with one important difference. Unlike a general partnership, in which individual partners are liable for the partnership's debts and obligations, an LLP provides each of its individual partners protection against personal liability for certain partnership liabilities.

In 1991 Texas enacted the first LLP statute, largely in response to the liability that had been imposed on partners in partnerships sued by government agencies in relation to massive savings and loan failures in the 1980s. The Texas statute protected partners from personal liability for claims related to a copartner's Negligence, error, omission, Incompetency, or malfeasance. It also permanently limited the personal liability of a partner for the errors, omissions, incompetence, or negligence of the partnership's employees or other agents. By the mid-1990s, at least twenty-one states and the District of Columbia had adopted LLP statutes.

The limit of an individual partner's liability depends on the scope of the state's LLP legislation. Many states provide protection only against tort claims and do not extend protection to a partner's own negligence or incompetence or to the partner's involvement in supervising wrongful conduct. Other states provide broad protection, including protection against contractual claims brought by the partnership's creditors. For example, Minnesota enacted an expansive LLP statute in 1994. This piece of legislation provided that a partner in an LLP was not liable to a creditor or for any obligation of the partnership. It further provided, however, that a partner was personally liable to the partnership and copartners for any breach of duty, and also allowed a creditor or other claimant to pierce the limited liability shield of a partner in the same way a claimant may pierce the corporate veil of a corporation and personally sue an individual member of the corporation.

In states that recognize LLPs, a partnership qualifies as an LLP by registering with the appropriate state authority and fulfilling various requirements. Some states require proof that the partnership has obtained adequate liability insurance or has adequate assets to satisfy potential claims. All states require a filing fee for registration and also require that an LLP include the words Registered Limited Liability Partnership or the abbreviation LLP in its name.

A partnership that renders specific professional services may form an LLP and register as a professional limited liability partnership (PLLP). A PLLP is generally the same as an LLP except that it is an association solely of professionals. Each state specifies the qualifying professions for a PLLP. This business form is typically available to attorneys, physicians, architects, dentists, engineers, and accountants. New York's LLP statute restricts eligibility solely to partnerships that render professional services.

Further readings

American Law Institute–American Bar Association (ALI ABA) Committee on Continuing Professional Education. 1996. Partnerships, LLCs, and LLPs: Uniform Acts, Taxation, Drafting, Securities, and Bankruptcy. 12th ed. Vol. 1. Philadelphia: ALI-ABA.

Bromberg, Alan, and Larry Ribstein. 1995. Limited Liability Partnerships and the Revised Uniform Partnership Act. Boston: Little, Brown.

Callison, J. William. 1995. Partnership Law and Practice. New York: McGraw-Hill.

Dickerson, Claire Moore. 1991. Partnership Law Adviser. New York: Practising Law Institute.

limited liability partnership

a new kind of legal entity through which business maybe carried on in the UK, brought into effect on 6 April 2001. It is a cross between the limited company and the partnership. It permits two or more people to combine to carry on business in partnership but gives them the benefit, which normal partnership does not, of limiting their liability to creditors. The limited liability partnership is a separate entity from its partners and has to be registered with the Registrar of Companies.
References in periodicals archive ?
The Limited Liability Partnerships (Register of People with Significant Control) Regulations 2016 amend the Limited Liability Partnerships (Application of Companies Act 2006) Regulations 2009, to apply Part 21A of the Companies Act 2006 to LLPs (with appropriate modifications).
The proposed Limited Liability Partnership Regulations are broadly aligned with the UK Limited Liability Partnership Act regime.
Therefore, when you go back to India and start an NBFC, you will not be able to contribute capital and become a partner in a partnership firm, including a limited liability partnership.
Specialist commercial law firm Robert Muckle has just converted to a limited liability partnership following its expansion.
Keith Proudfoot, regional manager of the Institute of Chartered Accountants in England & Wales, said: "All limited companies and limited liability partnerships are required to submit their annual accounts to Companies House.
1) Prior to 2000, foreign partnerships didn't have to be separately identified, and were included in the statistics for domestic partnerships as general, limited, limited liability partnerships limited liability companies, or other.
For purposes of the proposed SOP, this includes general partnerships, limited partnerships, limited liability partnerships (LLPs) and limited liability companies (LLCs) but does not cover S corporations or real estate investment trusts.
Corporate Advantages over Limited Liability Partnerships (LLPs)
The law also permits partnerships to register as Limited Liability Partnerships (LLP), professional partnerships to register as Registered Limited Liability Partnerships (RLLP), and recognizes LLPs from other jurisdictions.
The author has organized her text into nineteen chapters devoted to business organizations and agency law, sole proprietorships, general partnerships, limited partnerships, registered limited liability partnerships, and a variety of other related subjects.

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