Are you thinking about starting a Limited Liability Partnership? Do you want to know about the Limited Liability Partnership Pros and Cons before making a final decision? While these may not be the most popular type of business entity formed through our site, they’re certainly growing in popularity. This very well could be the right business entity for you. That said, if they aren’t, there are many other options available.
Pro: “Limited Liability” is in the Name
In a LLP, the partners can be protected. Specifically, depending on the structure, every partner’s liabilities are limited, specifically to how much they invested in the business. This can be an invaluable protection should the business struggle or fail. With a LLP, creditors can’t come for anyone’s income or personal assets.
Yes, hopefully, your business succeeds. But, it’s only wise to do what you can to minimize the risk for everyone involved at the beginning of the company. One partner won’t be held liable for another partner’s mistakes with a LLP.
Many professionals opt to run an LLP because it provides them with the freedom to run their business as they see fit.
With a LLP, every partner, should they choose to do so, can manage the business. That said, two or more partners also have the choice to run the business as a partnership, should they so choose. For the most part, you can choose how to operate the business as well as distribute the profits. In an LLP, all of this can be determined by a written agreement.
In fact, if you so choose, you can even deem the LLP to be a legal person. You can use it to own property, rent, lease, employ staff, and so forth.
Pro: Membership Options
Bringing partners in and releasing them from the LLP easily is another of the benefits to a Limited Liability Partnership. To have a LLP, you must have a partnership agreement. So, how people can be added or removed from the LLP follows what’s in that agreement. Thus, with an LLP, provided that you follow that agreement, you can always bring in new partners, other partners can leave, and so forth.
Many who started an LLP through us also have junior partners, too. They tend to do some of the more repetitive tasks, day to day work, and so forth, so that the other partners can put all of their attention on growing the business.
Limited Liability Partnership Pros and Cons
These are mostly used by those who are experienced professionals. LLPs are often started by experienced lawyers, wealth managers, those who have been with accounting firms for a period of time, and so forth. So they may not be the right fit for someone just getting started.
Moreover, you can’t find a LLP in every state. Indeed, many states don’t offer these particular business entities. What we can tell you, however, is that we can help you to start a business entity in the state of your choosing. To see all that we offer, click here.