A. A Limited liability partnership protects each partner from personal liability for certain obligations of the partnership. The limited liability partnership differs in one important way from general partnerships. Each partner is not liable to the other partner's debts or obligations as they would be in a general partnership.

In the United States, each state has its own laws governing the formation of a limited liability partnership. It is a popular form of partnership in some professions. Architects, lawyers and accounts are particularly fond of the limited liability partnership. In some states, limited liability partnerships can only be formed for these professions. The liability of the partners involved also fluctuates from state to state. In section 306c of the Uniform Partnership Act, a guideline that many state laws are based upon, the limited liability partnership forms a limited liability similar to that of large corporations. The Act states that a partner's role in the partnership does not make him or her personally liable for any obligations.

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A. A limited liability company and a limited liability partnership offer, essentially, the same legal protection. Both entities shield owners from liability related to the operations of the entity. In other words, if an LLC or an LLP engages in some behavior that triggers financial liability, the LLC members and the LLP partners are not liable merely by virtue of their status as owners. Note: The owners of a limited liability company are called members, and the owners of a limited liability partnership are called partners. Similarly, if an LLC or LLP breaches a contract and the breach creates economic damages for another party, again the LLC members and LLP partners are not liable merely by virtue of their ownership. Moving beyond these llc vs llp generalizations, however, you should note that state laws control the particulars of the legal protections offered by limited liability companies and limited liability partnerships. And in some jurisdictions, a limited liability partnership may have or may be required to have one partner whose personal liability is NOT limited.

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A. LLPs allow for pass-through taxation as its income is not taxed at the business level, but an informational tax return for the partnership must still be completed. Any income or loss of the LLP as shown on the return is passed-through to the partners' individual tax returns. The partners must then report the income or loss on their individual tax returns and pay any necessary tax.

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A. No, you can prepare and file the registration of limited liability partnership yourself or through an online provider like Chaptergroup.com, but it's good to understand the requirements of your state of formation. If you are not sure of what business type would be most beneficial for your specific situation, consult an attorney or accountant.

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A. As a Limited Liability company you must have at least 2 Partners.

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A. The primary benefit conferred by the LLP is that of limited liability, which protects partners from being responsible for the actions of other partners. Limited liability is one of the traditional advantages of the corporation. Unlike a corporation, though, in which stock holders must elect a board of directors to run the company, a limited liability partnership allows for direct control by the owning partners.

To clarify, the concept of limited liability means that the company's investors (in this case, the partners running the company) are not responsible for the entire value of their company's debts, only their investment in the company. Additionally, it protects a partner from the impropriety of other partners. For example, if a partner has been secretly embezzling money without the knowledge of the other partners, the other partners are not responsible for those crimes. The limited liability partnership first became prominent in the American business world after the Savings and Loan crisis in Texas in the 1980s. As banks faltered, people attempted to get their money back from the law firms and accountants who had advised the banks. In order to protect these people from the possibility of personal bankruptcy, the government helped organize these firms into limited-liability partnerships which afforded them a degree of protection from litigation.

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