Limited liability partnerships are popular among professional service firms (lawyers, accountants, doctors, etc.). They give limited liability to partners for the actions of other partners. For example: Bob, Richard and Bill are partners in BRB LLP. Bob is being sued by a client for his actions. Although Bob might be personally liable for his actions Bill and Richard will be protected up to their investment in the partnership.

 

Key Highlights

• More than one owner.

• Limited liability for partners with the exception of personal torts.

• Limited liability for actions of other general partners.

• All income, losses, assets, and liabilities are shared among the owners.

 

Formation

• Legal documents must be filed with the state.

• Governed by the Revised Uniform Partnership Act.

 

Operations

• General partners run the day-to-day operations of the business.

• Limited partners may have a say in the management of the business without forfeiting limited liability protection.

• Partners share income and losses per partnership agreement.

1

Termination

• Either one of the partners die, or;

• The owners chooses not to continue with the business.

• May terminate whenever the owners want.

• Partnership agreement will spell the out terms of termination. If there is no such wording in the partnership agreement or the partnership agreement doesn’t exist then Revised Uniform Partnership Act (RUPA) will govern the termination.