You can start a business on your own. However, if you want to succeed, you can look for partners. If you want to start a business with your partners, should you form an LLC or an LLP? The former lets you use our LLC application online service. But we also have a service if you opt for an LLP.
LLP and LLC Application Online Services
We make our services simpler so that you do not have to go very far and carry out various tasks just to file your application. You simply have to send us your documents and we will verify them. So, which one should you file? LLC or LLP?
Choosing the Right Legal Structure
It is a critical decision to choose the right legal structure. You need to consider which option offers significant implications for liability, taxation, and overall business operations.
Liability Protection
Both LLCs and LLPs provide limited liability protection to you. They shield your assets from the business’s debts and liabilities. In both structures, the owners are generally not personally responsible for the business’s financial obligations. However, the scope of liability protection can vary depending on the jurisdiction in which your business operates.
Management Structure
The management structure differs between LLCs and LLPs. The former is typically managed by members or appointed managers. It provides flexibility in decision-making. Members can participate in the daily operations or hire managers to handle management responsibilities. LLPs, on the other hand, are managed by people designated by you and your partners who are responsible for the partnership’s operations.
Ownership Structure
If you and your BFF want to start a business, LLC is a good idea because this structure allows a single member or multiple members. It offers flexibility in ownership structure. Your LLC can be an individual, corporation, or other LLC. LLPs are formed by two or more partners who share ownership and management responsibilities. LLPs are commonly used in professional service industries. For instance, if you are a lawyer, you can put up a law firm and register it as an LLP.
Taxation
For federal tax purposes in the US, both structures are considered pass-through entities by default. It means that the business’s profits and losses pass through to the owners’ tax returns. LLCs have more flexibility in how they are taxed, however. They can choose to be taxed as a disregarded entity, a partnership, or an S corporation. LLPs are generally taxed as partnerships.
Professional Services
LLPs are associated with professional service industries. As mentioned, they can be law firms or they can also be LLPs for accountants, doctors, and other professions. However, there are restrictions on the types of businesses that can form LLPs, depending on the jurisdiction. LLCs, however, are not limited in terms of the types of businesses they can be used for.
Registration
The requirements for forming an LLC or LLP vary depending on the jurisdiction. If you need help in this, make sure to use our LLP or LLC application online service or just give us a call today.
