What is the defining feature of a Limited Liability Partnership (LLP)?

What is the defining feature of a Limited Liability Partnership (LLP)?

• A. Partners have limited liability for partnership debts.
• B. Partners have no liability protection whatsoever.
• C. The partnership is treated the same as a general partnership for liability purposes.
• D. Only debtors have risk; partners are insulated entirely.

Answer: (A)

Limited liability partnerships provide liability protection to the partners. The defining feature is that partners are not personally on the hook for the partnership’s debts and obligations—the partnership's creditors generally pursue only partnership assets, not each partner’s personal assets. Each partner is typically responsible for their own conduct, so liability for the actions of fellow partners is limited, though exceptions apply if a partner personally guarantees a debt or engages in their own malpractice.

Limited liability partnerships provide liability protection to the partners. The defining feature is that partners are not personally on the hook for the partnership’s debts and obligations—the partnership's creditors generally pursue only partnership assets, not each partner’s personal assets. Each partner is typically responsible for their own conduct, so liability for the actions of fellow partners is limited, though exceptions apply if a partner personally guarantees a debt or engages in their own malpractice.