Are you trying to determine which business entity is right for your company? Does it feel like an LLC isn’t quite right, but an LP isn’t, either? If so, then, depending on your state, you may want to consider all the benefits of forming an LLLP Partnership. An acronym for “Limited Liability Limited Partnership,” this more recent legal entity type could very well meet your needs as well as those of the other partners. It’s just one of the many kinds of business entities you can form using the Corporation Center.
What Makes an LLLP Different?
In an LLLP (as in many other business entities), there are general partners and limited partners. Limited partners tend to be, well, limited in their involvement. Often, they’re simply investors in the company. General partners, on the other hand, tend to work on the business daily, putting in the team. One of the main factors that separates an LLLP from the rest is that general partners, in an LLLP, aren’t responsible personally for the business’s liabilities. They have more protection. That’s not how it works with an LP.
Why is This Important?
This is important because it can protect a general partner from liability. To use an example, say that the company incurs debts or even a lawsuit is brought against it. In an LLLP, the general partner doesn’t have any personal responsibility for those. Thus, they have greater protection than they may with other forms of entities. As LPs were created as a “hybrid,” combining elements of other business entities, they also have other benefits. For example, just as with LLCs, LPs, and similar, you can buy and sell stock, bonds, etc.
What Should I Keep In Mind About LLLPs?
While an LLLP does offer more liability protections, they don’t offer what you could find in corporations, S-corps, and the like. Moreover, these really are rare. As of this writing, you can form an LLLP in around 30 states. So, they might not be an option in your state. Moreover, they’re typically (but not exclusively) formed by real estate companies. With an LLP, investors in the company can only lose the amount they invested. So, that makes them popular for certain projects but not a great fit for others.
Options in Addition to Forming an LLLP Partnership
You may have read to this point and thought: “OK, that all sounds good. But, I’m still not sure an LLLP is the right fit for my needs.” That’s perfectly understandable. Here at Corporation Center, we have many different business entity options for you to choose from, in states all across the country. Yes, many of our clients use these forms to start a business in Delaware but so many states have benefits that could be what your business needs to get started right. Whether you’re forming an LLLP, LLP, LLC, Corporation, or so much else, you can find the forms you’ll need (as well as when you need them) right here at our site.