Limited Liability Partnerships
In California, the Limited Liability Partnership (LLP) is used by professionals such as attorneys, accountants, and architects. Unlike a general partnership, with a Limited Liability Parternship, each partner may limit their liability. Generally, with a California LLP, a partner is not liable for the negligence or the wrongful acts or misconduct of another limited liability partner or of the employees and agents of the LLP. This differs from LLPs in many other states. In California, LLP partners may also nevertheless agree to be jointly and severally liable – the same as in a general partnership – for certain specified obligations.
A California LLP is generally treated as a general partnership for purposes of state and federal income taxes. This generally means that each individual partner is responsible for paying taxes on his or her own share of income from the LLP. The State Bar of California (governing attorneys) and the State Board of Accountancy (governing accountants) have specific rules and forms that must be filed to legally operate as an LLP.
Porter Law Group regularly works with professionals in the creation of LLPs. We welcome the opportunity to understand your business needs and help you select the business entity that best suits your needs.
