Limited Liability Partnership

A Limited Liability Partnership (LLP) is a business structure that combines features of both a partnership and a corporation. It offers limited liability protection to its partners while allowing them to actively participate in the management of the business.

Limited Liability: The key feature of an LLP is that it provides limited liability protection to its partners. This means that the personal assets of the partners are protected from the debts and liabilities of the business. However, partners are still personally liable for their own negligence or misconduct.
Partnership Structure: Like a traditional partnership, an LLP is owned and managed by its partners. The partners share the profits and losses of the business according to the terms of the LLP agreement.
Separate Legal Entity: An LLP is a separate legal entity from its partners. It can enter into contracts, own assets, sue or be sued in its own name, and continue its existence even if one or more partners leave the business.
Flexibility: LLPs offer flexibility in management and decision-making. Partners can actively participate in the day-to-day operations of the business without risking unlimited personal liability.
Regulatory Compliance: LLPs are subject to certain regulatory compliance requirements, such as filing annual returns and financial statements with the relevant government authorities. However, these requirements are often less burdensome compared to those for corporations.
Taxation: LLPs are typically taxed as partnerships, meaning that the profits and losses of the business are passed through to the partners, who report them on their individual tax returns. This avoids the issue of double taxation that corporations may face.
Professional Services: LLPs are often favored by professionals such as lawyers, accountants, architects, and consultants who wish to operate as a partnership while enjoying limited liability protection.