Which business entity was specifically established in Texas in 1991?

The correct answer is that the Limited Liability Partnership (LLP) was specifically established in Texas in 1991. This type of business entity allows for a partnership structure while providing limited liability protection to its partners, meaning they are not personally liable for the debts and obligations of the partnership beyond their investment in it. This was a significant development in Texas as it allowed professionals to collaborate while minimizing personal risk, a crucial consideration for many service-oriented businesses.

The introduction of the LLP facilitated more flexible business practices and encouraged more professionals, such as lawyers and accountants, to organize their practices in a way that protects them from partnership liabilities while enjoying the benefits of a partnership structure. It has since become a popular choice among various service industries, providing a blend of partnership and corporate features.

In contrast, Limited Partnerships (LP) existed prior to 1991 and do not offer the same level of liability protection to all partners. S Corporations are another type of business entity, but they were established under federal law rather than being specific to Texas in that year. Professional Corporations were also not unique to Texas in 1991 and different from the LLP in their liability structure and operational guidelines.