As you are probably aware, creating a Limited Liability Company, or simply LLC has its challenges. There are many different aspects you will need to consider, and a great deal of it is to do it properly on your first try. This article in particular will give you some advice when you are forming an LLC or corporation. In addition to that, we will also provide you with some useful resources you might want to get started. Furthermore, if you are the owner of a firm, you might be considering whether or not a Limited Liability Partnership (LLP) might be the best for your business. You will also be able to determine if that is the best course of action after reading the following lines.
What is an LLC?
Whenever you are starting a company, if you do the proper research you will notice you will begin reading terms like “LLC” or “Corporation”. Each of these words has its benefits and disadvantages as any different business model. It is crucial to know the advantages and drawbacks of any organizational structure, or you may end up unsure about what type of firm to establish. We normally recommend consulting an attorney to help you resolve the confusion and answer any questions you may have.
Keep in mind that knowing the advantages and disadvantages of these two types, will help you make a decision about what type of structure is better for your business. It is better to delay the incorporation until you know where you want your firm to be heading than to do it in a rush.
Differences Between LLC And LLP
It is now the time for some definitions. According to the University of Cornell, an LLP is a nonincorporated business organization that retains elements of both partnerships and corporations. The forming of an LLC allows firms to have flexibility in arranging the organizations to the needs of the investors. It can be composed of members that equally own and control the business or with some members having different control or profit allocations. The investors in an LLC have limited personal liability in the business.
An LLP, on the other hand, is a legal entity created by two or more people. They share the ownership and profits of a particular business. There is a fee that needs to be paid to establish the partnership and, even though a lawyer is recommended to draft certain documents, you might do some of them by yourself. A key advantage of LLP is the fact that you can protect your assets if the company fails. It would be the company’s assets, the ones used to settle debts if a court finds the owner accountable. LLCs, on the other hand, may utilize personal assets, while corporations won’t.
The Corporation Center Can Help You Out
Whenever you have a business that involves more than one person, especially if it is a company, you should have a formal agreement. This will secure the firm and its assets and make sure that everyone is on the same page when it comes to responsibilities in the organization. You don’t have to do this by yourself: when forming an LLC, there are some people who can help you out. The Corporation Center, for instance, can help you consider taxes, and liability protection and to know how much control you want to have on a daily basis. Call us at (800) 580-4870 for more information!