What is a Limited Liability Partnership (LLP)?
A Limited Liability Partnership (LLP) is a hybrid business entity that combines features of a partnership (operational flexibility, pass-through taxation) with limited-liability protection typically associated with corporations. Each partner is protected from personal liability for the negligent acts of other partners or employees — but generally remains liable for their own professional malpractice. LLPs are most commonly used by professional-service firms: law firms, accounting firms, consultancies.
Key features
- Limited liability: each partner shielded from the firm’s debts and other partners’ professional malpractice.
- Pass-through taxation: profits and losses flow to partners’ personal returns; no entity-level tax.
- Partnership governance: internal management structure flexible, governed by the partnership agreement.
- Public registration: formal filing with the state/jurisdiction required.
LLP vs. related structures
- LLP vs. General Partnership: general partners have unlimited personal liability; LLP partners have limited liability.
- LLP vs. LLC: LLC has more flexible structure; LLP is typically restricted to professional services in many U.S. states.
- LLP vs. C corporation: LLP avoids double taxation but is generally unsuitable for raising venture capital.
The hybrid — and why Türkiye has no direct equivalent
A limited liability partnership blends features of a partnership and a company: partners run the business directly and are taxed as partners, yet are shielded from personal liability for the firm’s debts and, crucially, for each other’s professional negligence. That last point is why LLPs are popular for professional-services firms (law, accounting, consulting) in the UK and US. Turkish law has no direct LLP equivalent — the closest domestic forms are the ordinary partnership (adi ortaklık) and limited partnership (komandit), which allocate liability differently. So a Turkish founder encountering an LLP is usually dealing with a foreign (often UK or US) structure, and should take advice on how that entity is recognised, taxed and enforced in Türkiye before joining or contracting with it.