Unlike many business entities, which have one or two options, partnerships have four basic types and choosing the right one for your business is one of the most critical decisions you can make. While all a partnership requires at face value is two owners working together, each type of partnership carries advantages and disadvantages and the limited-liability partnership (“LLP”) is no different.

The key difference between an LLP and some other partnership forms is that it allows partners to avoid personal liability for the financial and legal obligations of the business. For many entrepreneurs, this carries a crucial allure. The LLP allows them the comparative freedom of partnership as a basic business form, but carries some of the advantages that corporations enjoy – and without the tax consequences.

However, LLPs still carry a downside. If gridlock develops between the partners or one of the partners passes away, the business is terminated. Like all other partnerships, transfers of ownership are also not permitted. While this may not pose problems in the short term, it certainly can over longer periods, where partners may disagree about paths for growth or partners differ significantly in age or health.

At Garrett, Walker & Aycoth, we are have the knowledge and skill required to help you weigh the advantages and disadvantages of LLPs. If you decide an LLP is right for you, our attorneys can also walk you through ways to avoid common pitfalls to make sure your business starts with the best shot at success. Call us today at (336) 379-0539 or contact us to schedule an in-depth consultation.