What Is A Limited Liability Corporation?

What is the difference between a limited liability corporation&a limited liability partnership?

• Answer:

  A limited liability partnership (LLP) and a limited liability company (LLC) contain elements of a general partnership combined with liability protection for the business owners. In states like California, LLP formation is limited to accountants and lawyers, but elsewhere a wide variety of businesses have the option to choose an LLC business structure.SizeAn LLP must have a minimum of two partners. LLCs may have an unlimited number of owners, also known as members. Furthermore, many states allow LLC formation with a single owner.LiabilityAs indicated on the Toolkit website, many states provide partners of an LLP with a reduced form of limited liability, also referred to as a "limited shield." Personal creditors of LLP partners can pursue business assets to recover personal obligations. Personal creditors of LLC members may not go after business assets to recover personal debts.TypesStates like New York restrict LLP formation to professionally licensed individuals, such as lawyers, architects and accountants. On the other hand, an LLC member may be an individual, corporation, foreign entity or another LLC.InsuranceMany states impose mandatory insurance requirements on partners of an LLP, according to the Toolkit website. Insurance requirements may not be imposed on members of an LLC.TaxesAccording to the Internal Revenue Service, an LLC may elect tax status as a corporation, sole proprietorship or partnership, which means an LLC may elect pass-through or corporate taxation. Pass-through status allows LLC members to include their share of profits or losses on an individual tax return. LLPs lack flexibility in terms of choosing a tax election. An LLP is strictly a pass-through entity.Source:http://www.toolkit.com/small_business_guide/sbg.aspx?nid=P12_4265http://www.irs.gov/businesses/small/article/0,,id=98277,00.htmlhttp://www.diffen.com/difference/LLC_vs_LLPMore Information:http://www.bizfilings.com/products/llp.asphttp://www.llcsexplained.com/Whats-the-Difference-between-an-LLC-and-LLP.htm