What does LLP stand for?

• A. Limited Liability Partnership
• B. Limited Liability Brokerage Partnership
• C. Long-Term Liability Partnership
• D. Limited Legal Partnership

Answer: (A)

LLP stands for Limited Liability Partnership. This structure protects each partner from personal liability for the debts and obligations of the partnership, so a partner’s personal assets aren’t at risk for what the business owes. However, this protection doesn’t shield a partner from liabilities arising from their own professional mistakes or negligence. This setup is common for professional service firms like lawyers or accountants who want to limit risk to the partnership as a whole while still allowing partners to participate in management. It’s different from a general partnership, where partners can be personally liable for business debts, and from an LLC, which is a separate legal entity with its own distinct protections and tax treatment.