A limited liability partnership (LLP) is comparable to an ordinary partnership in that a number of individuals or Limited Companies share in the risks, costs, responsibilities and profits of the business.
In an LLP, however, one partner is not responsible for another partner's misconduct or negligence. This is an important difference from that of a typical partnership. All partners in an LLP hence have a form of limited liability for each individual's protection within the partnership. The level of liability is limited to the amount of money invested and any personal guarantees that have been established to raise finance.
This is similar to being the shareholders of a corporation. Unlike corporate shareholders though, the partners have the right to manage the business directly, whereas corporate shareholders have to elect a board of directors to manage the business for them.
The LLP must be registered with Companies House as well as with the Employment Service and Income Tax Office. Annual accounts for both the business and its partners must also be submitted. An LLP is a slightly more complex structure and appointing a suitable licensed service provider to set it up is recommended.