LLP   (LIMITED LIABILITY PARTNERSHIP)

DEFINITION
A limited liability partnership  (LLP) is a general partnership that offers limited liability to all investors while preserving the opportunity to obtain pass- through tax status reserved for partnerships under federal and state laws.  An LLP is much like a limited partnership, but there are no general partners exposed to unlimited liability, and there are no limitations on involvement in management by limited parties.  

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 A Limited Liability Partnership (LLP) is a relatively new type of business structure.  This structure was developed in response to the huge personal liability problems faced by partners of law and accounting partnerships in the last few years.  LLPs can be thought of as simply a special type of general partnership that exists under state law.

The partners in an LLP normally remain personally responsible for the business' debts and legal liabilities.  The partners are also liable for the responsibilities related to their own professional acts and for the liabilities related to problems of persons under their supervision.  The good news is that LLP partners are generally not responsible for the professional errors of the other partners or most employees of the business.

You may want to consider this structure if you have been operating as a partnership and want to limit your responsibility for your partner's actions.  You may want to pass on this structure because it still does not offer you limited responsibility for your actions or offer any protection of your personal belongings if you or someone under your supervision is at fault.  Also, it is not completely clear what your business structure is in states that do not have LLP statutes.  Therefore, the LLP may be treated as a general partnership meaning that all of the partners have complete personal responsibility for the debts and liabilities of the business.