Z
ZanLar
Guest
What is the name of your state? New York
A business associate and I will be acquiring properties in upstate New York and we are deciding what legal entity to form, LLC or a LP ?
We are aware of the advantages of an LLC
Limited liability protection,
No restriction on the number or nature of shareholders,
"Pass through" of entity losses to investors (that is, profits and losses are passed on to partners without being taxed),
Avoidance of two levels of taxation,
Flexibility in design of structure, and easy removal of assets from the business.
The advantage of a Limited Partnership are;
limited liability as long as s/he does not participate in the control of the partnership business. The general partners of the LP are the ones who are responsible for the obligations of the LP. By spreading share ownership, individual exposure is considerably reduced. Even without a corporate general partner, risk can be spread by distribution of limited partnership shares.
I would like to hold the Real Estate property under the LLC and both of us become managing members. My associate would like to hold the RE properties under an LP making both of us limited partners and a newly formed LLC as the general partner with only 1% ownership.
Thank you.
A business associate and I will be acquiring properties in upstate New York and we are deciding what legal entity to form, LLC or a LP ?
We are aware of the advantages of an LLC
Limited liability protection,
No restriction on the number or nature of shareholders,
"Pass through" of entity losses to investors (that is, profits and losses are passed on to partners without being taxed),
Avoidance of two levels of taxation,
Flexibility in design of structure, and easy removal of assets from the business.
The advantage of a Limited Partnership are;
limited liability as long as s/he does not participate in the control of the partnership business. The general partners of the LP are the ones who are responsible for the obligations of the LP. By spreading share ownership, individual exposure is considerably reduced. Even without a corporate general partner, risk can be spread by distribution of limited partnership shares.
I would like to hold the Real Estate property under the LLC and both of us become managing members. My associate would like to hold the RE properties under an LP making both of us limited partners and a newly formed LLC as the general partner with only 1% ownership.
Thank you.