LLP (Limited Liability Partnership)

A LLP is a legal entity whose partners are 100% personally liable for his or her personal negligence, but not for acts of negligence committed by the other partners. It is created through the filing of a Certificate of Limited Liability Partnership. This is usually only used by professionals, like lawyers and doctors because historically they were not allowed to operate as corporations or limited liability companies for public policy reasons (the government did not want professionals using a corporate veil to hide from their personal negligence). The franchise tax paid is based on the number of partners, which is $200 per year per partner.