LLP(Limited liability partnership)

A limited liability partnership (LLP) is a business structure in which some or all of the members (depending on the state) have limited responsibility. As a result, it can display aspects of partnerships and businesses. Each partner in an LLP is not responsible or liable for the misbehaviour or carelessness of another partner.

This is a significant distinction from the typical partnership established under the UK Partnership Act 1890, in which each partner is liable jointly (rather than jointly and severally). Some or all partners in an LLP have limited responsibility, comparable to that of a corporation’s shareholders. Unlike corporate shareholders, partners have direct control over the business.

Corporate shareholders, on the other hand, are required by various state charters to elect a board of directors. [1] The board organises itself (also under the laws of the various state charters) and chooses corporate officers, who have the legal responsibility to govern the corporation in the best interests of the business as “corporate” individuals. In addition, unlike a corporation, an LLP has a separate degree of tax liability.

Limited liability partnerships differ from limited partnerships in some countries, which allow all LLP members to have limited liability, but a llp may require at least one unlimited partner and allow others to act as passive and limited liability investors.

As a result, the LLP is better suited for enterprises in these nations where all investors want to participate actively in management.

In some jurisdictions, an LLP is required to have at least one “general partner,” who bears unlimited liability for the company.

The LLPs established in the United States differ significantly from those established in the United Kingdom under the Limited Liability Partnerships Act 2000 and adopted elsewhere. Despite its name, the UK LLP is specifically regulated as a corporation rather than a partnership.