A special form of partnership in which it exhibits some attributes of corporation and some of a partnership. Within a Limited Liability Partnership there are two kinds of partners:
General Partners – Have full management and control of the partnership business. Their exposure to creditors is unlimited as each general partner can be both jointly and severally liable. General partners can be individuals or corporations.
Limited Partners – Limited partners have no personal liability beyond the amount of their investment into the partnership. Limited partners are restricted from participating in management of the corporation.
Here are some items to consider when operating as a limited liability partnership
- Limited liability of some partners
- Increased flexibility of the business than a general partnership
- Each partner can contribute as much or as little as they wish
- No corporate income taxes
- More difficult and typically more costly to set up the business than a general partnership
- General partner(s) have unlimited liability
- Not all jurisdictions allow the usages of limited liability partnerships