What is a characteristic of a limited liability partnership (LLP)?

In a limited liability partnership (LLP), one of the defining characteristics is that partners are not personally liable for the debts or wrongful acts of other partners. This feature distinguishes LLPs from general partnerships, where partners typically share personal liability for the partnership’s obligations. In an LLP, individual partners are protected from personal liability, meaning their personal assets are generally shielded from claims against the partnership or from another partner's misconduct. This structure encourages more individuals to engage in partnership while minimizing financial risks, making it an attractive option for professionals like lawyers, accountants, and architects.

In contrast, the other statements do not accurately reflect the nature of an LLP. For instance, partners being personally liable for LLP debts contradicts the fundamental purpose of an LLP, which is to provide that limited liability. The notion that all partners must be corporations is also incorrect, as LLPs can consist of individuals and do not require corporate status. Lastly, regarding taxation, LLPs typically enjoy pass-through taxation similar to general partnerships, rather than being taxed as corporations, which aligns with individual partners reporting their share of profits on their personal income tax returns.