Also known as: limited liability partnerships · LLP · LLPs
Written by attorneys · grounded in primary & secondary sources — see below
A form of general partnership that registers with the state to shield its partners from personal liability for debts, obligations, or other liabilities incurred by the partnership or by other partners. The shield applies solely by reason of partner status and does not protect a partner who personally breaches duties owed to the partnership, such as by consenting to an improper distribution.
Lumen Capital operates as a registered limited liability partnership. After a contract dispute, a supplier obtains a large judgment against the firm. The supplier then attempts to collect the judgment from partner Leah Lamb personally. Because the obligation arose while the firm was an LLP, Leah faces no personal liability solely by reason of her partner status.
Lotus Pharmaceuticals, an LLP, issues financial statements that investors later claim contained material misrepresentations. Several investors sue the firm and its partners. The partners who did not participate in preparing the statements invoke the LLP shield and are not held personally liable for the firm's obligations arising from the statements.
Select any source to read its text and confirm it supports the definition.
Lunar Dynamics, an LLP, faces a competitor's lawsuit alleging unfair competition. The court examines whether the competitor has standing to pursue claims against the firm and its partners. The LLP structure limits the partners' exposure to the competitor's claims that rest solely on partner status.
Lattice Systems, an LLP, holds a partners' meeting to approve a large cash distribution. Managing partners Logan Lane and Latoya Lane receive warnings that the distribution will leave the firm insolvent. They approve it anyway. After insolvency, the trustee sues the managing partners, who remain personally liable for the improper distribution despite the LLP shield.
Lola Langley serves as managing partner of an LLP subject to oversight by a regulatory board. The board attempts to remove her for cause under statutory procedures. The LLP's limited-liability structure does not alter the removal standards that apply to her position.
Lucy Liu, a partner in an LLP, is named in a complaint alleging the firm engaged in parallel anticompetitive conduct. The complaint contains only conclusory allegations of agreement. The court applies heightened pleading standards and dismisses the claims against Lucy because the allegations fail to suggest she acted beyond her partner status.
No. The statutory shield protects partners from personal liability for ordinary firm debts and obligations incurred solely by reason of partner status. It does not protect a partner who consents to a distribution that violates statutory solvency rules and who fails to exercise due care in doing so. Such a partner remains personally liable to the partnership for the improper amount.
Supporting sources
No. Under the governing statute a liability incurred while the partnership is an LLP is solely the debt of the limited liability partnership. A partner is not personally liable for that liability solely by reason of being or acting as a partner. Non-treating partners therefore face no personal liability for the employee's malpractice.
Supporting sources
No. The statute expressly provides that the failure of a limited liability partnership to observe formalities relating to the exercise of its powers or management of its business is not a ground for imposing liability on a partner. Partners therefore remain protected even when the firm lacks written protocols or holds no formal meetings.
Supporting sources
…each ILEC's obligation to share its network with competitors, Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, LLP , 540 U.S. 398 (2004), which came to be known as "competitive local exchange carriers" (CLECs). A CLEC could make use of an ILEC's network in any of three ways: by (1) purchasing local…