limited liability partnership

(redirected from Limited liability partnerships)
Also found in: Dictionary.

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.

West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.

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.
Collins Dictionary of Law © W.J. Stewart, 2006
References in periodicals archive ?
17 ( ANI ): As many as 107 companies and seven limited liability partnerships (LLPs) are under the scanner following the billion dollar scam unearthed by Punjab National Bank (PNB).
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.
Unlike many businesses, limited liability partnerships, partnerships and sole practitioners are not directly assessed for tax on the business' profits, but will commonly arrange to settle individual partners' liabilities.
He demonstrates how to analyze situations by defining categories of behavior and attaching consequences to those categories, as he discusses topics ranging from introductory concepts to financial and management issues to limited liability partnerships. Aspen Publishers is now Wolters Kluwer Law & Business.
Godrej Industries Ltd has announced that the Board of Directors of the Company at its meeting held on July 27, 2010, has approved formation of Limited Liability Partnerships (LLPs) with Godrej Properties Ltd.
Limited Liability Partnerships: When a company is converted into an LLP, the transfer of shares will be tax-exempt to retain tax neutrality.
The company acts for all types of owner-managed enterprises including limited companies, limited liability partnerships, partnerships, and sole traders with turnovers ranging from a few hundred pounds to tens of millions.
AN ACCOUNTANT is recommending a new method in corporate structuring - Limited Liability Partnerships (LLP) - which he claims offer benefits.
Jim Crook, managing director of the Old Hall Street-based agency, said October 1 sees the introduction of several elements of the 2006 Companies Act, including new rules for trademark applications, a new seven-day cooling off period which applies to doorstep selling and limited liability partnerships, together with the new rates for the national minimum wage which will rise across the board for each of the three separate age levels.
Steve McNicol said: "All the major international accountancy firms changed to Limited Liability Partnerships as they became larger and increased the number of partners.

Full browser ?