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Individual Assignment: Partnership Paper

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Individual Assignment: Partnership Paper

FIN/419
March 19th, 2012
James Hagist

Individual Assignment: Partnership Paper For this individual assignment titled partnership paper, I will write a 700-word paper in which I explain the roles of limited liability corporations and limited liability partnerships. In addition to explaining the roles of limited liability corporations and limited liability partnerships I will describe establishing my own company.

Roles of Limited Liability Corporations The “Internal Revenue Service" (2012) website states that a Limited Liability Company (LLC) is a business structure allowed by state statute. LLCs are popular because, similar to a corporation, owners have limited personal liability for the debts and actions of the LLC. Other features of LLCs are more like a partnership, providing management flexibility and the benefit of pass-through taxation. There are advantages and disadvantages to being in an LLC, let’s start with providing the advantages, advantage one is taxes, when you are in an LLC there is no double taxation, advantage number two is liability, an LLC offers the same protection against liability that a corporation holds. The disadvantages, disadvantage number one is number of owners, an LLC must have at least two owners or members, disadvantage number two is taxes, an LLC must pay self-employment taxes.

Roles of Limited Liability Partnerships According to "Nolo" (2012), a limited liability partnership (LLP) is a partnership in which some or all partners (depending on the jurisdiction) have limited liability. It therefore exhibits elements of partnerships and corporations. In an LLP, one partner is not responsible or liable for another partner's misconduct or negligence. This is an important difference from that of an unlimited partnership. In an LLP, some partners have a

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