An LP generally offers limited liability for investors. However, one partner must still act as a general partner (GP) with unlimited liability. In practice, a special purpose vehicle without assets is usually set up as the GP to try to 'ring fence' any potential liability. In an LLP all the partners (or 'members' as they are more commonly known) enjoy limited liability and their position is largely analogous with that of shareholders in a limited company in that, subject to certain limited exceptions, the liability of any member of an LLP is limited to his or her capital contributions made to the LLP. An LLP also exists as a separate 'body corporate' with its own distinct legal personality separate from that of its members and, unlike an LP, will contract in its own name.
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