Limited Liability Partnership (LLP)

A Limited Liability is a partnership firm, wherein the partners (as per jurisdiction) have specific limited liability. This type of company therefore has a few elements of partnerships and corporations. Moreover, in an LLP, one partner cannot be held responsible for any misconduct or negligence caused by another partner. Partners in an LLP have limited liability which is similar to that of shareholders in a corporation.  However, unlike corporate shareholders, partners in such a form have the right to control the business directly.

The LLPs in the United Kingdom come under the Limited Liability Partnerships Act 2000(in England and South wales) and the Limited Liability Partnerships Act (Northern Ireland) 2002  in Northern Ireland.   

Unlike a Partnership firm (not followed in England and Wales) which requires having a legal existence upon its members (Exclusive in England and Wales), a UK Limited Liability Partnership has a continuing legal existence independent of its members.

A UK LLP's members includes a collective (“Joint) responsibility as agreed upon the “LLP agreement” and has no individual (“several”) responsibility for actions.  Members in a limited  company or corporation cannot lose more than  they invest, in any case of fraud or wrongful trading. 

The collective and individual rights & responsibilities along with the flexibility are unique features of the entity and therefore require agreement. Moreover, no written agreement is required for LLP as they  are based on default provisions.