Which statement accurately describes a limited liability partnership (LLP)?

• A. Some or all partners have limited liabilities; one partner is not responsible for another's misconduct.
• B. All partners have unlimited liability.
• C. It is identical to a corporation for liability purposes.
• D. There is no liability protection for any partner.

Answer: (A)

In an LLP, partners enjoy limited liability for the partnership’s obligations, meaning personal assets aren’t at risk for the partnership’s debts. Importantly, each partner isn’t personally responsible for the misconduct of other partners; the focus is on protecting you from being liable for what another partner does, while you’re still liable for your own actions. This combination—limited liability for partnership liabilities plus protection from others’ wrongdoing—is what makes the statement accurate. The other descriptions misstate LLPs by suggesting unlimited liability, treating them as identical to a corporation for liability purposes, or denying any liability protection.