Limited Liability Partnership (LLP)

Definition:

A partnership where liability of some or all partners (depending on the jurisdiction) is limited. In some countries, an LLP must also have a general partner whose liability is unlimited and who manages the LLP. Notably, one partner is not responsible or liable for another partner’s misconduct or negligence. In some LLPs, each limited partner’s liability is also limited to the value of his or her investment in the LLP. An LLP incorporated in the United Kingdom is not a partnership but a body corporate with a separate legal personality and is tax transparent. Its members have limited liability and great flexibility in determining its governance agreement.

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