Are you trying to give your business a more formal structure? Do you know what an LLP is? If that is your case, this is the article for you. Let us discuss the benefits that creating a limited liability partnership can offer to your company, so you can determine whether or not this is a type of structure that suits your needs. Without further ado, let us tell you why having an LLP is probably the best option for your company.
The Main Benefit of an LLP
Probably the most important advantage that having a limited liability partnership can give to you is that your assets will be kept safe from business debtors. In the words of utah.gov, an LLC differs from a general partnership inasmuch as its members are not personally liable for the obligations of the LLC. This can help in protecting your company in the case a customer sues you, or protect you if someone sues you directly.
Unlike a normal partnership, where each partner is equally responsible for the firm’s financial debts, partners in an LLP have what is called limited liability, therefore the name. Their liability depends on their contribution. As such, in the event of a crisis, their personal assets remain unaffected, even if an LLP has any unpaid debts. This way, partners have a sort of immunity, with the exception of fraudulent activity.
What a Limited Liability Partnership Has to Offer
A limited liability partnership gives more options to business owners. The partners can decide the level of their contribution to the operations of the business individually, and the managerial responsibilities can be both shared equally or divided according to the experience of the members. In addition to that, partners who have a financial interest in the company can decide whether or not to have authority on business decisions without losing their percentage stake in the company. When the decisions partners make are based on personal interests rather than the whole partnership’s interests, being that flexible in the operations can become a disadvantage.
LLP can decide how to distribute the profits to the members. Cash flows quickly with loans and returns, as opposed to limited companies that have to have available profits before declaring dividends. They can also add and remove members faster than LCs. Given that LLPs are not compelled to publish their constitutions, the organizational structure and arrangement of profit distributions normally remain private.
The Corporation Center Can Help You With Your LLP
Now that you know the many benefits of a limited liability partnership, it is time to fill out the paperwork. You will probably need a certificate that will include basic information about the company and its partners. The document will then need to be printed and sent to the Secretary of State’s office for processing. Of course, this can be done on your behalf with the help of the Corporation Center. Our online forms allow you to quickly and easily set up your LLP. Just select the state in which you are located and, after you fill out the form, our representatives will soon contact you for more information.