By: Pilar Salazar
Limited Liability Partnership
A limited liability partnership provides all of its owners with limited personal liability. With a LLP, you get the advantages of liability protection, flexibility, and being liable for filing personal income taxes, self-employment taxes and estimated taxes for yourself. Some disadvantages are that is that individual partners are not obligated to consult with other participants in certain business agreements, some states recognize you as a nonpartnership for tax purposes, and in some states LLPs are not recognized as legal business structures. An individual in a LLP is recognized as an employee for tax purposes. Examples of a LLP are large legal and accounting firms, organizations made of doctors and healthcare professionals, or venture capital and similar investment funds.
A corporation is an independent legal entity owned by shareholders. Adavantages of a corporation include limited liability, ability to generate capital, it looks attractive to potential employees, and being able to file taxes seperately from the owner. The disadvantages are that they are time consuming and costly to start up, can sometimes be taxed twice, and they are required to do extra paperwork.