LLC Versus LLP
A limited liability company is different from a limited liability partnership company or LLP. A limited liability company can face restrictions on taxes with state’s franchisee taxes whereas the limited liability partnership company can offer a lot of organizational flexibility.
Both LLC and LLP provide limited liability options to their owners and both are ideally suited for small business. The amount or nature of liability is greatly subject to the law of the state which would al so determine which is better for the business. A limited liability company can be treated as a sole proprietorship company or a partnership company. In whichever case, it combines the benefits of the corporation and the partnership company. A limited liability partnership company can be treated only as a partnership company while it offers the remaining benefits of the LLC.
However, many people agree that the LLP fades in front of the LLC for just one reason alone. That is the LLP protects one partner from the other by minimizing the liabilities of the partner to the other partners mistake. The liability is controlled only between two partners and is not extended to the over all business picture. In a limited liability company the liabilities are reduced against everyone like debtors and banks and their personal assets are protected. The laws of the limited liability company also state that the debts, liabilities and obligations of the company are the company’s alone and do not extend to the partners or the owner of the business.
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