Limited Liability Partnerships (LLP) Lawyers
The limited liability partnership (LLP) is a general partnership with limited liability status. LLPs were created shortly after legal and accounting firms were sued after the financial institutions they backed failed. Many of the firms were general partnerships, with the result that individual partners were held liable for the negligence and misconduct of other partners. To alleviate the problem, states created LLPs that gave protection to the innocent partners.
Who Forms Limited Liability Partnerships?
Typically, LLPs are reserved for specialized professions in order that the partners may avoid liability for negligence or misconduct of other partners. Because a LLP is a general partnership with limited liability status, it runs like a general partnership and has the same flexibility of control with income, losses, and gains passing to the partners according to the partnership agreement or interests of the partners.
What Type Of Liability Protection Does A Limited Liability Partnership Afford?
The liability of a partner in a LLP is limited only to the negligence or misconduct of other partners. A partner is, however, liable for all other debts and obligations of the partnership that does not stem from negligence or misconduct.
What Is The Difference Between A Limited Liability Company (LLC) and Limited Liability Partnership?
A limited liability company (LLC) and LLP are essentially the same thing. A LLC, however, has the same liability shield as a corporation and the members of an LLC may not be personally liable for the debts and obligations of the company.
How Is A Limited Liability Partnership Created?
Like most limited liability organizations, the LLP was created by statute. Thus, each state's statute will specify the process for becoming a LLP. Most require that you file for a certificate with the Secretary of State. If you are already a general partnership, however, then states require the partnership to file for a certificate to convert from a general partnership to an LLP.
Do I Need An Attorney Experienced With LLPs?
The selection of the right business entity is vital to the success and organization of a organization. Therefore, hiring a attorney experienced with LLPs will help you to analyze the pros and cons of choosing a particular business entity. If you decide an LLP is right for you, a lawyer can help you draft your state's required filing documents.
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Last Modified: 03-15-2011 11:55 AM PDT
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