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STRUCTURES
Ways to set up a business.One of the key decisions to make after deciding to start you own business is what type of legal structure you should use to define the type of company you own.

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Opening a new business used to involve standing in long lines, asking the same questions to dozens of people and trying to decipher numerous forms and permits.
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Limit Liability Partnership (LLP)

A limited liability partnership (LLP) is governed by existing partnership law except to the extent that the law has been modified for the LLP. Partners in an LLP are still designated and treated as partners. Likewise, the LLP is taxed in the same manner as a partnership.

The LLPs attractiveness is the limited liability of the partners. A key goal of an LLP is to limit the liability of the partners for the actions of every other partner in the partnership. However, this liability protection does not usually cover the general obligations of the partnership such as normal commercial obligations. In addition, the LLP structure does not limit a partner's liability for one's own misconduct. This is true for an LLC as well.

Advantages

  • Limitation on liability for partners
  • Flexibility of capital structure
  • Flexibility in allocating income and expense to owners
  • Flow through of taxes to individual owners

Disadvantages

  • Might be more expensive to create than a sole proprietorship or general partnership
  • Variation of requirements from state to state. Laws aren't as uniformed as they are for corporations
  • May incur more legal issues since some LLP statutes are still untested in court with many situations