What is a limited liability partnership (LLP)?

A limited liability partnership (LLP) is defined as a partnership where some or all partners enjoy limited liability, which protects them from personal responsibility for the debts and obligations of the partnership. This structure strikes a balance between the flexibility of a partnership and the limited liability feature typically associated with corporations.

In an LLP, partners are generally not liable for the negligence or misconduct of other partners, which encourages collaboration while safeguarding personal assets. This protection promotes a safer environment for individuals to engage in business collectively, knowing their personal finances are shielded from the partnership's liabilities, barring any personal guarantees or instances of wrongdoing.

The other options pertain to characteristics of partnerships that do not apply to LLPs. For instance, LLPs specifically do not have all partners liable for debts equally, nor do they expose partners to unlimited liabilities, which is a hallmark of general partnerships. Additionally, calling an LLP a type of corporation is incorrect, as it maintains the partnership's nature while incorporating specific liability protections. This distinct identity is crucial for understanding the advantages and operational framework of an LLP.