September 26, 2017

LLP – Limited Liability Partnership

A limited liability partnership, or LLP, is a business structure designed for partners who want an equal voice in managing their business, but not an equal share of the liability.

Generally speaking, a partner in an LLP is not responsible for the debts or liabilities of the other partners. This makes the LLP a popular choice for professional service organizations such as accounting, architecture, or law firms.

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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 an equal voice in managing the business. It also protects members 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 they are specifically designed to limit malpractice claims against uninvolved partners. Partners are liable for debts and obligations created as a result of their own negligence, malpractice or misconduct, as well as those of any person under their direct supervision.

 

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Contact the RI business formation attorneys at the Rhode Island law firm of Bardorf & Bardorf with any questions regarding the business formation or appropriate business structure for your RI business.