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Definition of a Limited Liability Partnership or LLP

A limited liability partnership, or LLP, is a relatively new creation. It operates much like a limited partnership, but gives each member of the LLP protection from personal liability, except to the extent of their investment in the LLP.

Generally, partners in a limited liability partnership aren't responsible for another partner's debts, obligations, or liabilities resulting from negligence, malpractice or misconduct.

Professional organizations (such as accounting and law firms) often form as limited liability partnerships because an LLP is specifically-designed to limit malpractice claims against uninvolved partners. Each partner is liable for debts and obligations created as a result of his or her own negligence, malpractice or misconduct, as well as negligence, malpractice or misconduct by any person under that partner's direct supervision.

 

 

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