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Tax Entities
Partnership or LLP Business Entity for Your Start Up or Small Business?
Lean on the Experience of an Award Winning Pittsburgh CPA Firm.
A partnership is similar to a sole proprietorship except that two or more people are involved. Advantages are that it is easy to establish, can draw upon the financial and managerial strength of all the partners, and the profits are not directly taxed. Some disadvantages are unlimited personal liability for the firm's debts and liabilities, termination of the business with the death of a partner, and the fact that any one of the partners can commit the firm to obligations.
The partnership is formed by an agreement entered into by each partner. This agreement may be informal, but it is advisable to have a written agreement drawn up between all parties. While no filing is required to form a general partnership, it may be required to file a fictitious name registration.
Limited Partnership
A limited partnership is a partnership formed by two or more persons having one or more general partners and one or more limited partners. The limited partners have limited exposure to liability and are not involved in the day-to-day operations of the limited partnership.
Limited Liability Partnership
A limited liability partnership (LLP) is an existing partnership that files an election with the Corporation Bureau, Pennsylvania Department of State, claiming LLP status. The effect of becoming a LLP is to provide general partners with additional protection from liability.
Dennis Piper & Associates Provides Business Consulting for Start-Ups and Small to Medium Businesses
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