For those seeking to do business but need the protection of limited liability, there are 2 important alternatives to using companies. They are limited liability partnerships (LLPs) and limited partnerships (LPs).
Both offer the informality of partnerships with none of its disadvantages of unlimited personal liability and complex regulation.
The difference between an LLP and an LP is the with the former, all partners have limited liability whereas with an LP, at least 1 partner, known as the general partner, must have unlimited liability. Only this partner is allowed to take part in the management of the partnership business with the limited partners being silent partners.
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