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A 'limited liability partnership (LLP)' has elements of partnerships and corporations. In an LLP, all partners have a form of limited liability, similar to that of the shareholders of a corporation. However, the partners have the right to manage the business directly, and (in many areas) a different level of tax liability than in a corporation.
Limited liability partnerships are distinct from limited partnerships, in that limited liability is granted to all partners, not to a subset of non-managing "limited partners." As a result the LLP is more suited for businesses where all investors wish to take an active role in management.
There is considerable confusion between LLPs as constituted in the US and that introduced in the UK in 2001 and adopted elsewhere - see below - since the UK LLP is, despite the name, specifically legislated as a Corporate body rather than a Partnership.

Contents

National variations

United States

European Union

United Kingdom

Japan

France

Germany

India

Romania

References

National variations

United States

In the United States, each individual state has its own law governing their formation. Limited liability partnerships emerged in the early 1990s: while only two states allowed LLPs in 1992, over forty had adopted LLP statutes by the time LLPs were added to the Uniform Partnership Act in 1996.^[1]
Although found in many business fields, the LLP is an especially popular form of organization among professionals, particularly lawyers, accountants and architects. In some U.S. states, namely California, New York, Oregon and Nevada,, LLPs can only be formed for such professional uses.
The liability of the partners varies from state to state. Section 306(c) of the Revised Uniform Partnership Act (1997)(RUPA) (a standard statute adopted by a majority of the states) grants LLPs a form of limited liability similar to that of a corporation:
:An obligation of a partnership incurred while the partnership is a limited liability partnership, whether arising in contract, tort, or otherwise, is solely the obligation of the partnership. A partner is not personally liable, directly or indirectly, by way of contribution or otherwise, for such an obligation solely by reason of being or so acting as a partner.
However, a sizable minority of states only extend such protection against negligence claims, meaning that partners in an LLP can be personally liable for contract and intentional tort claims brought against the LLP. While Tennessee and West Virginia have otherwise adopted RUPA, their respective adoptions of Section 306 depart from the uniform language, and only a partial liability shield is provided.
As in a partnership or limited liability company (LLC), the profits of an LLP are allocated among the partners for tax purposes, avoiding the problem of "double taxation" often found in corporations.
Some US states have combined the LP and LLP forms to create limited liability limited partnerships.

European Union

Starting a business and incorporating an LLP, or any other company in the EU: http://ec.europa.eu/youreurope/nav/en/business/life-events/start/index.html,
See also: http://ec.europa.eu/youreurope/nav/en/business/life-events/start/companies-legalstructure/index_en.html

United Kingdom

In the United Kingdom LLPs are governed by the 'Limited Liability Partnerships Act 2000'. A UK Limited Liability Partnership is a Corporate body - that is to say, it has a continuing legal existence independent of its Members, as compared to a Partnership which may (in England and Wales they do not) have a legal existence dependent upon its Membership.
A UK LLP's members have a collective ("Joint") responsibility, to the extent that they may agree in an "LLP agreement", but no individual ("several") responsibility for each other's actions. As with a limited liability company or a corporation Members in an LLP cannot, in the absence of fraud or wrongful trading, lose more than they invest.
A UK LLP is tax transparent or pass-through for tax purposes, that is to say it pays no tax but its Members do in relation to the income or gains they receive through the LLP.
It is a unique entity in its synthesis of collective and individual rights and responsibilities and its infinite flexibility - there is in fact no requirement for the LLP agreement even to be in writing because simple partnership-based regulations apply by way of default provisions.
It has to date been closely replicated by Japan - see below - and by the financial centres of Dubai and Qatar. It is perhaps closest in nature to a limited liability company in the United States of America although it may be distinguished from that entity by the fact that the LLC, while having a legal existence independent of its Members is not technically a Corporate body because its legal existence is time limited and therefore not "continuing".
See also EUROPEAN UNION (EU) above.

Japan

were introduced to Japan in 2006 during a large-scale revamp of the country's laws governing business organizations. Japanese LLPs may be formed for any purpose (although the purpose must be clearly stated in the partnership agreement and cannot be general), have full limited liability and are treated as pass-through entities for tax purposes. However, each partner in an LLP must take an active role in the business, so the model is more suitable for joint ventures and small businesses than for companies in which investors plan to take passive roles.^[2][3] Japanese LLPs may ''not'' be used by lawyers or accountants, as these professions are required to do business through an unlimited liability entity.^[4]
A Japanese LLP is not a corporation, but rather exists as a contractual relationship between the partners, similarly to an American LLP. Japan also has a type of corporation with a partnership-styled internal structure, called a godo kaisha, which is closer in form to a British LLP or American limited liability company.

France

See Société En Participation
See also EUROPEAN UNION (EU) above.

Germany

See Gesellschaft mit beschränkter Haftung
NOTE: A Gesellschaft mit beschränkter Haftung(GmbH), is NOT a LLP, but a corporation.
See also EUROPEAN UNION (EU) above.

India

In India, a concept paper on Limited Liability Partnership Law was brought out by the Ministry of Company Affairs in 2005. In the year 2006 the Limited Liability Partnership Bill was introduced in the Parliament. The Limited Liability Partnership Act is yet to be enacted.
Please refer to the Discussion tab on top of this page for details.

Romania

See also EUROPEAN UNION (EU) above.
See Societate civilă profesională cu răspundere limitată

References

1. Addendum to the Prefatory Note, Uniform Partnership Act (1997).
2. Hiroaki Kitaoka, Esq., 有限責任事業組合（日本版LLP）（1）：中堅中小企業にも利用価値のある制度 (in Japanese)
3. Japanese LLP Act (English translation)
4. Ministry of Economy, Trade and Industry, 40 LLP Questions and Answers (in Japanese)