What is a limited liability partnership and what are its features?

A limited liability partnership (LLP) is a business structure established by state law featuring limited personal liability for all partners. This means that the partners are liable for business debts and obligations up to the amount of their investment in the business, but their individual assets are not at risk. LLPs are frequently used in Washington by professional services companies, such as medical or legal practices, or firms that provide a range of professional services. The limited liability feature is a significant benefit for professionals, such as doctors or lawyers, because it offers a degree of protection for individual members against liability for the negligence of other members of the LLP. LLPs in Washington also offer the benefit of pass-through taxation. All of the LLP’s profits, losses, deductions and credits are filed on the individual partners’ returns. This eliminates the need to file a separate corporate return, saving money and administrative hassle. LLPs also differ from traditional partnerships in that the partners usually have an equal share of responsibility, regardless of their individual contributions to the LLP. This is unlike the traditional partnership structure, where each partner can have an unequal share of the business’s profits, losses, and obligations. Washington requires limited liability partnerships to file a Registration Statement with the Secretary of State and to provide annual reports, which must include financial information about the LLP and a list of all current partners. Overall, limited liability partnerships provide liability protection for all partners, pass-through taxation, and a more equitable division of responsibility among partners.

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What is a limited liability partnership and what are its features?

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