What is a limited liability partnership?
A limited liability partnership (LLP) is a business structure that is available to certain professionals in California. It is a hybrid between a general partnership and a limited liability company. An LLP is a type of partnership in which each partner has limited personal liability for the debts and obligations of the business. This means that each partner is only responsible for the amount that they put into the partnership. In California, LLPs are typically used by members of the legal, accounting, and financial services professions. For example, a law firm or accounting firm may choose to form an LLP rather than a traditional corporate structure because it can provide the benefits of professional regulation and liability protection for its members. When a business is formed as an LLP, the members are not personally liable for the debts and obligations of the business. This type of business structure offers a more flexible governance structure than a corporation. The members of the LLP are able to decide how to manage the business operations, while still protecting their personal assets from liability. In order to form an LLP, the partners must first register with the California Secretary of State. They must also establish certain internal documents such as a partnership agreement, which outlines the roles and responsibilities of each partner. Overall, a limited liability partnership is a business structure available to certain professionals in California that provides certain benefits such as personal liability protection and a flexible governance structure. It requires registration with the California Secretary of State and the establishment of certain internal documents.
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