What type of partnership allows for limited liability protection against malpractice?

Limited Liability Partnerships (LLPs) are specifically designed to provide partners with limited liability protection against personal liability for malpractice or negligence committed by other partners within the firm. In an LLP, each partner's liability is generally limited to their investment in the business, meaning they are not personally responsible for the misconduct of their peers, which is a key feature that distinguishes LLPs from other forms of partnerships.

For context, general partnerships do not provide any liability protection; all partners share unlimited liability for debts and obligations. Limited partnerships do offer some liability protection, but only to limited partners, who are not involved in the management of the business and thus have limited liability. Meanwhile, sole proprietorships do not encompass a partnership structure and do not provide any liability protection, as the individual owner is personally liable for the business’s debts and obligations.

Therefore, Limited Liability Partnerships are particularly appealing to professionals such as lawyers or accountants who might want to work together while protecting themselves from liability arising out of their partners' actions.