What are the differences between a corporation, a limited liability company (LLC), and a limited liability partnership (LLP)?
Corporations, LLCs, and LPs are formed by filing a Certificate of Formation with the Secretary of State. Corporations are owned by shareholders, managed by a board of directors, and administered by officers. LLCs are owned by members and can be managed by members, one or more managers, or both. LPs are owned by limited partners and general partners, and managed by general partners. Both corporations and LLCs are subject to Texas franchisetax, but they may have different federal tax liabilities. LPs are also subject to Texas franchise tax, unless they are “passive” or otherwise exempt. These entities offer limited protection to their owners and managers from personal liability for their debts and obligations and may also offer tax advantages that are not available to sole proprietorships and general partnerships. The Secretary of State cannot offer the legal advice necessary to determine whether you should or should not form a corporation or LLC or register a partnership as an LLP. Only
Related Questions
- SHOULD THE SHARED OR FRACTIONAL OWNERSHIP USE A LIMITED LIABILITY COMPANY (LLC), OR LIMITED PARTNERSHIP (LP) OR LIMITED LIABILITY PARTNERSHIP (LLP)?
- ARE THERE ANY RESTRICTIONS ON A PHYSICIAN PRACTICING MEDICINE UNDER A LIMITED LIABILITY COMPANY (LLC) OR LIMITED LIABILITY PARTNERSHIP (LLP)?
- What are the differences between a corporation, a limited liability company (LLC), and a limited liability partnership (LLP)?
