Limited Liability

Limited Liability Corporation and Partnership Paper

Wanda Harris

FIN/419

11 January 2016

Philip Celestin

If you are thinking about running your own business, there are many things to take into consideration. When it comes to starting a business, there are many important decisions you should make which includes startup cost, business name, target market, location, legal requirements, and business structure. When you consider your business structure most importantly you need to consider whether or not you want to start as an individual or partnership. There are three main ways to label a business in which includes sole proprietorship, corporations, and partnerships. They all have something in common but when it comes to liability exposures they have some unique differences. Many states offer both LLC and LLP formations. This paper will explain the roles of Limited Liability Company (LLC) and Limited Liability Partnerships (LLP) as well as Class C corporations. It is also important to consider what circumstances regarding business structure led you to make the decision you chose to start your business as I have included my opinion in this paper.

A Limited Liability Company (LLC) provides limited liability features of a corporation but the tax efficiencies and flexibility operations of a partnership. In an LLC Creditors cannot hold owners accountable for a debt owed and taking it away from their personal assets if the assets of the company are not enough to cover the debt. The owners of an LLC can run the business themselves or hire someone to run the day to day operations. Owners of an LLC are also known as members instead of shareholders or partners because of its flexibility roles. According to SBA (2015), Depending on the state, the members can consist of a single or two or more individuals, corporations, and other LLCs.

A Limited Liability Partnership (LLP) has one or more managing partner that is responsible for the partnership’s actions...