By James Pickens, Esq.
Limited Liability Companies (LLC)
- A Limited Liability Corporation (“LLC”) holds the owners, or members, to limited liability. The primary benefit of an LLC includes member’s personal assets being protected if the business is sued.
- In a corporation, owners, or shareholders, are also limited in their liability. Ownership can be easily transferred through sale or gift of shares.
Subchapter S Corporations
- Owners receive the limited liability protection that they would get in a corporation, but the income and losses of the business are passed through the shareholders instead of the owner.
- Partners share unlimited liability; all personal assets of both partners are liable for all business debts and obligations.
Limited Partnerships (LP)
- A business partnership where one partner is the “general partner” and holds the managing responsibilities and is also personally liable for all debts and obligations of the business, while the other partner, the “limited partner” has limited liability for the business but does not have managing powers.
Limited Liability Partnerships (LLP)
- All partners share limited liabilities. They are not personally responsible for the business debts or obligations or for their partner’s misconduct or negligence.
- A corporation where all owners are generally required to be licensed in the same profession. Owners are liable for the business and any suits that may be brought against their company, but they are not liable for malpractice of other owners.
- The parties pool their personal resources to accomplish a goal usually for a limited period of time. Each party generally shares in the profits and losses
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