The limited liability partnership is a business ownership that is similar to a limited liability company (LLC) in that all partners have limited liability for business debts, but in many states this liability protection is less than what LLCs receive. 

Typically the use of LLPs is limited to professional occupations that require a license to do business.  A limited liability partnership agreement is especially appealing to businesses that were prohibited in the past from forming a limited liability company (LLC) or corporation, such as accountants and attorneys.

Typically only business owners in professions that require a state license in order to practice, such as accountants, architects, attorneys, chiropractors, doctors, dentists, etc., are allowed to form LLPs. An LLP is similar to an LLC: all partners have limited liability for business debts, in many states the protection of limited liability partnerships are less than what LLCs or corporations receive.

Advantages of limited liability partnerships

• Limited liability protection- Partners are not held personally responsible for business debts and liabilities (the limited liability partnership does not protect against liability for partners’ actions, however).
• Pass-through taxation- No tax is paid at the business level. Profits or loss are reported on the partners’ tax returns, and any tax due on business income is paid at the individual level.
• Conversion from general partnership- LLPs typically offer easier conversion from a general partnership to an LLP than to a LLC or corporation.
• Flexible management- Partners have more flexibility in management structure and can determine which partners are responsible for the day-to-day operations.
•  Few formal requirements- A limited liability partnership has fewer formal requirements and annual paperwork than corporations.

Disadvantages of an LLC

• Limited Life- In many states, when a member leaves an LLP, the business is dissolved and the members must fulfill all remaining legal and business obligations to close the business. The remaining members can decide if they want to start a new LLP or part ways. However, you can include provisions in your operating agreement to prolong the life of the LLP if a member decides to leave the business.
• Self-Employment Taxes- Members of an LLP like an LLC are considered self-employed and must pay the self-employment tax contributions towards Medicare and Social Security. The entire net income of the LLC is subject to this tax.