Reasons why it is more advisable to form a Limited Liability Partnership

a. tax benefits- as with a general partnership, the profits and losses in a limited partnership flow through the business to the partners, all of whom are taxed on their personal income tax returns. The difference is that the limited partners in the relationship get to share in the profits and losses, but they do not have to participate in the business itself.

b. liability limits-a limited partner’s liability for the partnership’s debt is limited to the amount of money or property that individual partner contributed to the partnership. This is not true of the general partnership, where any money or property contributed becomes an asset of all the partners.

c. the general partners take charge- in a limited partnership, the general partners deal with the daily operations and responsibilities and don’t need to consult the limited partners for most business decisions.

d. no turnover issues- limited partners can be replaced or leave without dissolving the limited partnership.

e. less paperwork- creating a limited partnership, like a general partnership, requires less paperwork than forming a corporation.