It may be a general or limited partnership. It is reflected in a written partnership agreement which sets forth the rights and obligations of each partner. From a liability point of view, however, there is complete personal liability of all general partners for any of the acts performed or liabilities incurred by that partnership in the course of its business. Further, all partners have the right to be involved in management. In a limited form of partnership, the limited partner has no personal liability or exposure beyond the partnership investment, but does not share in the management.
Partners do, however, remain personally liable for all other debts of the partnership.
An LLP also receives the same advantageous tax treatment as a general partnership. Its major advantage is that owners are protected from the liabilities incurred by the LLC entity. In that respect, the LLC has the same protection as offered by a corporation, but is treated as a partnership for tax purposes. Unlike corporations, there are no LLC directors or officers. Business or professional corporations are the long-accepted forms of creating a separate legal entity which operates a business.