Limited Liability Partnership (LLP)
A limited liability partnership (LLP) is a partnership where some or all partners (depending on the jurisdiction) have limited obligations. It, therefore, exhibits elements of partnerships and corporations. In an LLP, one spouse is not responsible or liable for a different partner’s misconduct or neglect.
In an LLP, some partners have a kind of limited liability like that of the shareholders of a corporation. Some countries require one spouse to be a”general partner” with unlimited liability, meaning that he/she is ultimately responsible for the debts of the company and for any lawsuits such as personal injury or breach of contract. Unlike corporate shareholders, the partners have the right to handle the company directly. In contrast, company shareholders have to elect a board of supervisors under the laws of different state charters. The board arranges itself (also under the legislation of the various country charters) and hires corporate officers who, as”corporate” individuals, then have the legal responsibility to deal with the corporation in the company’s best interest. An LLP also has a different degree of taxation obligation compared with that of a corporation.
As in a partnership or limited liability company (LLC), the profits of an LLP are allocated among the spouses for tax purposes, preventing the issue of”double taxation” frequently found in businesses.