What is an LLP or Limited Liability Partnership?

Answer:
A Limited Liability Partnership is a business

structure in which individual partners who do not participate in the day-to-day operations of the business are not legally responsible for negligent actions of the other partners, or those of employees they do not directly supervise.

This limitation of liability for the actions of others associated with the business is the only difference between a LLP and a standard partnership. Not all states recognize Limited Liability Partnerships. States that do recognize LLPs generally limit this type of business structure to professionals such as lawyers, accountants, and architects. LLPs are not taxable entities. All profits pass through to the partners, and are included on their tax returns as taxable income.