What is a limited liability partnership?

A limited liability partnership is a special type of partnership only used by businesses organized by certain types of professionals. For example, a group of lawyers or doctors may start a law firm or a health clinic as a limited liability partnership. The major distinction between this and other types of partnerships is that the owners of an LLP are not personally liable for the negligence of other partners, although they remain liable for their own negligence and for any debts or losses of the business itself. Thus, these are useful in states where the law or professional ethics rules will not allow the professionals to form a corporation or LLC, as it affords the owners at least some limited liability. For example, many state ethics rules do not allow lawyers to form anything other than a partnership, so a limited liability partnership at least affords the owners a little protection in the event that one attorney commits malpractice or some other negligent act.