Limited Liability Partnerships Essay Example | Topics and Well Written Essays - 2500 words

curb Liability Partnerships - Essay ExampleLimited indebtedness partnership (LLP) maintains the many characteristics of general partnership but shields the partner against un peculiar(a) liability from the creditors of the firm. In a Limited liability partnership the is the advantage of a flexibility of an unlimited partnership coupled with the limited liability of the partner as the business incorporated in this structure is treated as a consort legal entity and makes the entity responsible for any business debts arising thereof. In the US, state registration is required to muckle up an LLP. Besides the state needs proof that the partnership has reached levels or has enough resources to satisfy authorization claims in addition to satisfying insurance requirements. A limited liability partnership is non taxed as a separate entity instead the profits pass to the hands of the partner who are charged with income tax. (Irwin Mitchel 2008)The higher up are the basic characteristics of the limited liability partnership entity. Find below a few beta drawbacks of limited liability partnerships, which has been a block for many unlimited partnership concerns for conversion5. ... The money invested becomes the billet of the firm, is not subject to return unless, and otherwise stated in the agreements.2. All partners of an LLP must consent to the change of the as cliques. 23. The non-transferable nature of a partners interest where the transferee only the financial benefit but does not become a partner. (Cool lawyer 2008)4. LLP varies in legal requirements based on the laws of the state. This variable nature of this entity makes it the least preferable.5. Limited liability partnership has an important handicap it being limited to certain types of businesses only caseful an association of professionals example Lawyers, Chartered accountants, architects, doctors etc.Moreover, Limited liability partnership was only founded a hug drug over and the concept is still y oung which is subject to changes and bound by the laws of the state. In order to run across the reason for the unpopularity for this legal entity we must look at the features and viability of the other legal entities such as Limited corporations and general partnershipsLLCLLPUnlimited PartnershipWhat is it A type of companyA type of companyA type of company Members needed to set up Between 1-52 or more2 or more Taxation Single taxation (Income / loss passed straight to members) Single Taxation Single taxation (Income / loss passed directly to members)AssetsCan nail Can hold Can hold 3Legal entity Separate entity from partners but members may be held liable for non-fiscal obligations.Separate from those of partners Has separate legal entityManagement Level Only Members and managing members.Decentralized Partners are ManagersLegal