When going into business with a partner, figuring out which entity type best fits the company’s needs may be a bit complicated. Whether one’s business will be located in Georgia or elsewhere, there are several different types of partnerships that can be entered into when going through the business formation process. This week, this column will touch on one in particular: the limited liability partnership.
An LLP is a formal partnership. It is about more than partners sharing a common interest and wanting to make money. It is about creating a certain structure within the company.
With LLPs, there is a need for written partnership agreements. Every partner in an LLP has a place and a job, and each is given a way out if it is ever needed or wanted. All of this can be spelled out in detail in the partnership agreement.
When it comes to LLPs, there is simply flexibility and protections offered that cannot be found in other types of partnership arrangements. For instance, as far as protections are concerned, limited liability means that one’s personal assets will be protected should the company face legal action due to the actions of a partner. As far as flexibility goes, partners have a little freedom to do as they please, but there is still a lot of sharing going on — such as business space and staff, among other things — that help them reduce operational costs.
There are pros and cons to every type of business entity. At the end of the day, those in Georgia who are looking at entering business partnerships will have to weigh the positive and negative points and decide which best fits their needs. With the assistance of legal counsel, the business formation process, including the setting up of any necessary partnership contracts, can be completed swiftly and smoothly.
Source: investopedia.com, “Limited Liability Partnership (LLP): The Basics“, Andrew Beattie, Accessed on Sept. 21, 2017