What Is The Difference Between An LLP And An LLC?
Although they have similar names, an LLP (“limited liability partnership”) and an LLC (“limited liability company”) are different types of business structures.
The main differences include:
- An LLC can have a single member that manages the business, but an LLP must have at least two partners.
- It is easier to transfer ownership in an LLC than an LLP. In an LLC, the membership interest can simply be signed over to a new business owner. In an LLP, the transfer of a partnership interest requires more complicated documentation.
- In an LLC, a designated person can be the manager of the business. However, in an LLP, all of the partners are entitled to be involved in the management.
- LLCs and LLPs may be taxed differently. In an LLP, profit and loss are passed through to individual partners. In an LLC, this does not happen unless an IRS election has been made.
If you are not sure what business entity type is best for you, contact Adair M. Buckner, attorney, for a free initial consultation.*
*(The free consultation does not cover actual review of documents or giving legal advice on a specific situation.)