What is a limited liability partnership (LLP)?

A limited liability partnership (LLP) is defined as a partnership where all partners have the ability to manage the business while maintaining liability protection from the malpractice or negligence of other partners. This means that while all partners may actively participate in the management of the partnership, they are not financially responsible for the wrongful acts or omissions made by other partners in the course of business.

This structure is particularly beneficial in professional partnerships, such as law or accounting firms, where one partner's negligence should not unduly impact the other partners' financial responsibilities. The liability protection enhances the appeal of this partnership structure, allowing professionals to collaborate without exposing themselves to unlimited personal liability.

The requirement for registration with the state is an important aspect of establishing an LLP, ensuring legal recognition and the enforcement of liability protections among partners, but it is not the defining characteristic of an LLP. The other options either misrepresent the nature of the liability protections in LLPs or confuse them with other business structures.