If you're launching a business and considering starting a Limited Liability Partnership, FinishLine Tax Solutions can help. We are the Nation's top business services and a trusted tax relief firm. An LLP is also called a limited liability partnership. However, you may not know, but this type of business is very common. Likewise, you will find a Limited Liability Partnership listed at the end of the names of law offices. Furthermore, if you're considering filing for a Limited Liability Partnership, you'll find everything you need here. However, before you file, give us a call first. Similarly, our expert business consultants can help you determine if a Limited Liability Partnership is a right move for you.
Furthermore, we can help you with starting an LLP. Like any business, there are rules and regulations that go along with starting a Limited Liability Partnership. Likewise, our expert business consultants know everything you need to know about starting a Limited Liability Partnership. Therefore, give us a call before you get started. We'd love to help you set your business up for success.
What is an LLP?
A Limited Liability Partnership is a partnership that's formed between two business partners. For example, if two lawyers start a law firm, it's a Limited Liability Partnership. In the case of a Limited Liability Partnership, both partners have limited liability. In other words, each partner's liability is limited to the amount they invest. For example, if one partner invests more than the other, their liability is greater. To understand an LLP, you can consider it as a general partnership. In other words, it's a for-profit company that’s created by two or more parties. Essentially, a Limited Liability Partnership is two or more people working together to make money. Generally, a Limited Liability Partnership can be a pretty informal partnership. All the individuals need to start an LLP is:
- A shared interest.
- A written contract, although this isn’t necessary.
- And, a verbal agreement. This can even be done over a handshake or a fist bump.
Why start a Limited Liability Partnership?
Individuals can choose to start a Limited Liability Partnership for a variety of reasons. At the end of the day, how you choose to set up your business is a personal choice. Typically, an LLP is started by a group of people who have a lot of experience in their field. By partnering, the professionals can lower their cost of doing business. Furthermore, they can increase their opportunity to grow the business. For example, LLP partners can share office space, employees, and more. Furthermore, many professionals start a Limited Liability Partnership because they realize they'll frankly be better together. Likewise, partners in a Limited Liability Partnership can scale their business. They do this by hiring junior partners who don’t have a full stake in the corporation. However, they hire junior partners with the hope to make them full partners.
Advantages of starting an LLP
Other advantages of starting a Limited Liability Partnership include flexibility. Individuals involved in a Limited Liability Partnership can bring partners in as they wish. Additionally, Limited Liability Partnership members can push partners out as they wish. However, the decision to add partners usually requires approval from existing partners.
Furthermore, the flexibility of the LLC makes it a popular choice. Similarly, business owners often choose an LLP over an LLC. However, both Limited Liability Company and LLP are good options for a corporation.
What does limited liability mean?
Essentially, limited liability means exactly as it sounds. In other words, you may lose assets in your partnership under limited liability. However, you will not lose assets outside of it. In other words, your personal assets will not be at risk if something goes wrong.
What is the difference between starting an LLP and LLC?
There are differences between a Limited Liability Partnership and LLC. For example, the IRS taxes LLPs as partnerships. In this case, business owners report profits and losses from the business on personal income taxes. However, LLC has only one member. In contrast, LLPs must have at least two members. Lastly, the IRS taxes a single-member LLC as a sole proprietorship or a corporation.
How do taxes work for starting an LLP?
When you have an LLP, you pay taxes like any other corporation. Furthermore, this partnership reports business income and expenses on a partnership tax return. Additionally, each partner reports a share of the profits or losses on their personal returns. Like all other corporations, a Limited Liability Partnership must file an income tax return.
Interested in starting an LLP? Contact FinishLine Tax Solutions
If you're thinking of starting an LLP, contact the professionals at FinishLine Tax Solutions. We have years of experience helping individuals start their businesses. Additionally, we can help you determine if a Limited Liability Partnership is best for you. Our expert business consultation team can also help you with anything you need for your business going forward. We offer both business consulting services and also tax preparation services. Don't start your business on your own. Call us today to start your business. We look forward to helping you.
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