A limited liability partnership is a partnership that is created by two or more people, but unlike a general partnership, the various partners have different liability percentages. In a general partnership, all partners, unless otherwise stated in the partnership, split the liability equally. For example, if there were three partners in a partnership the profits and losses would be spilt 33.3% per person, any debts and liabilities would be divided up the same way.
Another thing that you need to be aware of when defining a limited liability partnership is not the same thing as a limited partnership. A limited partnership is where one or more partners have limited liability, including on any partnership card that is owned by one partner only. They are only limited to the amount of money that they invested in the business. A limited liability partnership offers each partner limited liability, but it also does more.
In addition to the limited liability that the partner receives, they are also not liable for another partner’s misconduct and negligence. What this means is if you form a limited liability partnership and Partner A gets into an accident while driving too fast for a work delivery, you and the other partners will not be liable for the accident and any bills that were incurred due to their causing the accident. This is a nice bonus because it means you will not lose everything that you have because of something that somebody else did; in effect, your personal assets are considered safe, much as they would be in a corporation setting.
The one thing that you want to look into if you are forming a limited liability partnership is what the state you are incorporating in will allow. Only some states will allow all of the partners to have limited liability in a limited liability partnership, other states will require one partner to have full liability.
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