Which of the following best describes a limited liability partnership (LLP)?

The definition of a limited liability partnership (LLP) centers around its primary characteristic: the limitation of personal liability for its partners. In an LLP, partners can protect their personal assets from the debts and obligations of the partnership, as well as from the misconduct of other partners. This structure encourages professionals, such as attorneys and accountants, to collaborate while minimizing financial risk.

The first choice accurately captures this essence of the LLP, emphasizing the protective nature of this business structure. In contrast, the other options do not accurately reflect the fundamental aspects or characteristics of an LLP. For instance, it is not classified as a corporation and does not typically involve stock options. Additionally, while specific licenses may be necessary for certain professions, the general operation of an LLP does not depend on requiring multiple licenses. Lastly, the notion that an LLP can only hire general partners misrepresents the structure, as LLPs can have both general partners and limited partners, unlike a traditional general partnership.