Are you ready to use your years of expertise to launch your own business? While this is surely an exciting idea, it can seem a bit daunting as well. After all, starting a business entails a fair amount of risk, and you may find that the odds are a bit more palatable when you have a partner. Partnerships are commonplace in the business world, and their arrangements can be informal or highly structured. In a Limited Liability Partnership (LLP), you can enjoy the benefits of working with a seasoned team, while also protecting your best interests. If this appeals to you, you may want to consider completing an LLP application online.
You can think of an LLP as a more formalized version of a General Partnership (GP). In a GP, two or more individuals have agreed to go into business together, perhaps with just a verbal or handshake agreement in place. Some partnerships may draft profit-sharing or operating agreements to allow for a more clear structure. An LLP, however, offers certain benefits that a GP, or even a Limited Partnership (LP), cannot.
Understanding the Concept of Limited Liability
As the name implies, a limited liability partnership grants its partners the protection of limited liability. What this means is that if one partner incurs a legal judgment or bankruptcy due to their own negligence or malfeasance, the other partners cannot be found liable. For this reason, LLPs are very popular among licensed professionals. Doctors, lawyers, dentists, and architects, for example, tend to gravitate toward LLPs. In fact, some states mandate that licensed professionals form LLPs and preclude them from Limited Liability Companies (LLCs) or other business structures.
The Tax Incentives in Forming an LLP
Similar to its structural cousin the LLC, LLPs are granted pass-through status by the Internal Revenue Service (IRS). This means that profits made by your partnership are not taxed until they pass through to the individual partners. As you can imagine, this is a considerable benefit, and when coupled with limited liability, it makes an LLP a dynamic business structure choice.
Get Your Business Started Today
It should be noted that LLPs are not available in all states. If, however, it is a possibility where you live, and you would like to proceed with creating this structure, there will be some paperwork to complete. You will need to draft a certificate for a limited liability partnership, which will call for some basic information about your business and its partners. This document can be printed out, inked by hand, and then submitted by mail to your Secretary of State’s office for processing.
Of course, there is an easier, online solution for completing this process. At Corporation Center, we have all the web forms you need to set up your LLP in just moments. Take a moment or two to browse our website, or contact one of our customer service agents for additional information today.