What's the difference between limited partnership and limited liability partnership?

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Chun Hin Pun

March 30, 2022 16:39

What's the difference between a limited partnership and a limited liability partnership(LLP)?

I know the difference between a general partnership and LLP but I came across the term limited partnership in some documents and I start to get confused...

Many Thanks!

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  Matthew Bowers March 30, 2022 18:23

  Limited Partnership: Composed of general partners and limited partners; general partners are personally liable for business, including the actions of other partners, and limited partners are liable only for their investments

  Limited Liability Partnership: Liability is limited to each partner's individual professional negligence and malpractice, and personal assets are protected, and requires a more complex formation process

   

  Easiest way to think about it is an LP being akin to a sole proprietorship, and an LLP being akin to an LLC - the most fundamental differentiator between them being liability protections.

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