LPs, LLCs, Corporations Advantages/Disadvantages

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LP advantages (5)

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1. limited liability for the limited partners
2. tax benefits
-not taxed as separate entity, BUT limited losses
3. can assign interests and doesn't dissolve the limited partnership
4. death/incompetence does not dissolve LP
-heirs can receive from LP
5. can get more capital if needed with adding investors

LP disadvantages (5)

1. unlimited liability for GPs
2. must have at least one GP
3. LP must file certificate before it can exist
4. yearly filings with state/annual schedules
5. can be seen as "more expensive" due to filing of forms

LLC advantages (4)

1. limited liability
2. unlimited members
3. taxed as a partnership
4. lots of flexibility

LLC disadvantages (4)

1. can assign financial rights, NOT liabilities
2. piercing the corporate veil
3. subject to state of domicile's jurisdiction
4. legal forms/filings/annual filings (can be expensive)

corporation advantages (5)

1. continuity if member/officer or director dies
2. limited liability unless corporate veil is pierced
3. central management team
4. transfer of ownership interest by the shareholders
5. choose their fiscal year

corporation disadvantages (3)

1. double taxation
2. pays franchising taxes, incorporation fees
3. piercing the corporate veil

LPs, LLCs, Corporations Advantages/Disadvantages

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