Question

Ch19 Q4 Analyze and Comment on "Business Application" - How do you choose between an LLC and LLP? Page 568.

Answer 1

LLC and LLp seem to be same but have many differences. LLC can have corporations as owners whereas LLPs cannot. Both have same tax benefits . LLCs need not have any partnership as liability but LLP must have. For large businesses where we need more partnerhips and coporations as owners LLC is the best option. For small business where one person is active partner and others are sleeping partners LLP can be chosen. Both have tax benefits where any loss in business makes them get returns.