Limited Liability Partnership
A partnership where each partner has limited personal liability, used for professional service firms.
A Limited Liability Partnership (LLP) is a hybrid business structure combining the flexibility of a partnership with the limited liability of a company. Partners are not personally liable for business debts beyond their capital contribution, except for their own wrongful acts. LLPs are taxed at the partner level (transparent for tax purposes) and require at least 2 partners. They are commonly used by law firms, accounting firms, and consulting practices.
Two consultants forming an LLP enjoy partnership-style profit sharing while shielding their personal assets from liabilities arising from the firm's contracts.