Which Incorporation Is Best For You: Comparing LLPs and LLCs

By: Eric P. Rothenberg, Esq. If you are a small business owner, or considering starting your own business, it has always been important to know your options for creating a new entity with limited liability. The uncertainty and financial stresses of COVID-19 and the subsequent recession make decisions about incorporation even more important. In this article, I will review two common types of new entities for small businesses: limited liability partnerships (LLPs) and limited liability corporations (LLCs) Limited Liability Partnerships (LLPs) In a limited liability partnership there must be more than one partner. Each of these partners (called “partners”) receive personal liability protection as a result of creating the entity under the Secretary of State. Governance of an LLP is shared equally among all partners, as are profits and losses, like a general partnership unless the operating agreement provides otherwise under the Uniform Partnership Act. An LLP is also taxed

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