Characteristics of LLP (Sections 2-3): (1) Separate legal entity—LLP distinct from members; (2) Perpetual succession—continues despite member changes; (3) Limited liability—members liable only to contribution extent; (4) Contractual capacity—LLP can own property, sue/be sued; (5) Common seal—LLP has official seal; (6) Internal management—flexibility in structure; (7) Transferability—member interest transferable with consent. Liability limitation: Members' personal liability limited to capital contribution; creditors cannot pursue personal assets. Designated partners: Must be individuals; responsible for regulatory compliance; personally liable for certain breaches. Comparison: Partnership (unlimited liability, no separate entity), Company (limited liability, regulatory burden), LLP (limited liability, less regulatory burden). Case law: Genie Corporation v. State of UP establishes LLP separate entity status. For accountants, LLP characteristics affect audit procedures, liability assessment, and member protections. Understanding characteristics critical for firm structuring and liability management. Exam tip: Distinguish characteristics from rights/duties; focus on liability limitation and separate entity status.