More businesses are opening every day, which means businesses and personal liability concerns are growing. Many concerns Depending on the type of business, an individual would need to research the advantages and disadvantages of forming a Limited Liability Partnership (LLP) or Limited Liability Corporation (LLC) to weigh the pros and cons of what would work best for the business. The roles of LLC and LLP will be discussed in this paper. Roles Limited Liability Corporations
One goal of an LLC is to take on a business structure, which corporations operate in a traditional partnership, distribute wages to partners (who report the income on their personal income tax return), and to protect each individual partner from any sort of personal liability for any of the company debts. Partners are not responsible for the debt of the company under the LLC rules as long as no personal assets are secured by the debts. An LLC is a good choice for smaller businesses that do not plan to grow into a bigger company and only plan to have one to three individuals owning the company.
The members of an LLC have ownership interest and are owners of the business. The members are not considered shareholders because the company is not a corporation. Depending on the Articles of Organization and the operations agreement the company has, some members do contribute to the daily management of the company. One role I personally like about an LLC is the members get to contribute to the daily operations of the company. Roles Limited Liability Partnerships
An LLP is similar to the LLC. In a LLP the limited liability affects every partner. Most LLP offices are used by accountants or lawyers, licensed professionals. One benefit of an LLP is partners do not take responsibility for what another partner does. So if partner A has debts then partner B would not be responsible for them and would be protected under the LLP. Under...