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A limited liability limited partnership (LLLP) consists of one or more that manage the business operations and that maintain a financial interest in the entity. This form of business structure is a hybrid of a , established by state statutes and authorized under the .. However, in contrast to a typical , both and are shielded from personal liability in the case of debt or legal action against the business with some exceptions.

In order to fully understand the LLLP, it is important to know the difference between general partners and limited partners in a . manage the day-to-day operations of the business. In contrast, are involved in a more limited capacity, usually only as an or as a . While statute has modified the exposure of , a in a is subject to unlimited liability for the partnership’s debts. The decision to form or elect to be a LLLP reduces the exposure to that of a eliminating personal responsibility or  for the liabilities of the business, including debt with some exceptions. This liability protection is an important distinguishing factor of a LLLPs.

While limited liability is a plus for a business to elect to be a LLLP, there are some other considerations. Notably, not all states recognize a LLLP.  Approximately either authorize the formation of the LLLP or require LPs to request a special election. and , such as , are commonly established as LLLPs. Other states such as prohibit the formation but require an LLLP to register with the before they start doing business in California.

This article is for educational purposes only.