A lot of prospective company applicants ask us, whether an LLC or LLP which is better and this isn’t really a simple question to answer. Let’s take a further look at this.
LLC or LLP, Which is Better?
If you are looking to create a company here in the United States, then you will be faced with a wide variety of options in regard to the structures available. How are you supposed to pick the right one for your intended business? Well, it will all ultimately depend on what will work best for your line of work, your intended business practice, and the way in which you wish to structure ownership arrangements. With this in mind, you might end up needing some guidance in regard to how to make a decision. Here at the Corporation Center, we can help you ask yourself, “An LLC or LLP, which is better?” Hopefully, we are able to help you make an informed choice and build from there.
Why Get an LLC?
An LLC is a form of a private company that is specific to the United States, defined by its business structure that can combine the pass-through taxation of either a sole proprietorship or a partnership with the limited liability of a corporation. You should keep in mind that an LLC is not a corporation under state law, but rather a legal form of a company that provides limited liability to its owners in many jurisdictions. These are known for the flexibility that they provide to business owners, for an LLC may elect to use corporate tax rules instead of being treated as a partnership, among other options. Because of this, it could be the best option for your corporation.
Why Get an LLP?
An LLP, on the other hand, is a partnership in which some or all partners (ultimately depending on the jurisdiction) have limited liabilities. Therefore, it can exhibit elements of partnerships and corporations. In LLPs, each partner won’t be responsible or liable for another partner’s misconduct or negligence, which means that some or all partners have a form of limited liability that is somewhat similar to that of the shareholders of a corporation. Unlike corporate shareholders, the partners in an LLP have the power to manage the business directly. In contrast, corporate shareholders have to, by law, elect a board of directors under the regulations of respective state charters. Additionally, an LLP also contains a different level of tax liability from that of a corporation.
Get Your LLC or LLP Processed
Our team at the Corporation Center is well aware of just how hard but important it is to take care of company formation documents and paperwork. After all, bureaucratic applications are always a bit of a tedious burden, but even more so when they come with the burden of your professional future. In order to help you with this process, we at the Corporation Center have set up our platform, which allows you to seek out, find, fill out, and submit the necessary forms when it comes to setting up your own company. Allow us to guide you through this complicated application process and feel free to reach out to us should you have any questions about it.