Limited Partnership: “Partnership formed by two or more persons formed under the provisions of M.G.L. Ch. 109, s.8, having as members one or more general partners and one or more limited partners.”<br /><ul><li>General Partners have unlimited liability, whereas limited partners liability is limited to what they have contributed to the partnership.</li></ul>Advantages:<br /><ul><li>Tax benefits
Considered a Separate Legal Entity that can own property, sue, and be sued</li></li></ul><li>“A limited partnership may merge or consolidate with one or more limited partnerships or other business entities as defined in M.G.L. Chapter 109, §16A.” – SEC website<br />Disadvantages:<br /><ul><li>General partners bears burden of running business
Formalities of limited partnership must be observed to keep business in good standing and properly safeguard the limited liability. </li></ul>“The merger or consolidation must be approved (1) by all general partners and (2) by the limited partners, or if there is more than one class or group of limited partners, then by each class or group of limited partners …..” – SEC website<br /><ul><li>Limited partnerships dissolve in event of the death, bankruptcy, or departure of a member.
Very important to have a well drafted partnership agreement to prevent conflict between partners.</li></li></ul><li>Limited Liability Partnership: “A form of general partnership that provides an individual partner protection against personal liability for certain partnership obligations”<br /><ul><li>Limited liability
Some protection to partners from malpractice suit against different partner
Unlike a general partnership in which individual partners are liable for partnership debts and obligations, an LLP provides protection for each individual partner against personal liability from certain partnership liabilities.</li></li></ul><li>EX: Three accountants formed an LLP in Ohio. Each shared in the management of the partnership and all were shielded from liability for the acts of the other partners.<br />“Some states require proof that the partnership has obtained adequate liability insurance or has adequate assets to satisfy potential claims. All states require a filing fee for registration and also require that an LLP include the words Registered Limited Liability Partnership or the abbreviation LLP in its name.”<br /><ul><li>An LLP differs from general partnership because all partners in an LLP are shielded from wrongful acts or negligence of other partners.</li></li></ul><li>Professional Corporation: A corporation of professionals. In some states, some professionals are permitted to form corporations under specific regulations, to allow the professionals to have the benefits of a corporation while meeting ethical requirements<br /><ul><li>Primary motivations for opting for a professional corporation are the tax benefits and personal liability limitations.
In some states professionals form corporations, but with the difference that each professional is still liable for his or her own wrongful professional actions.
Protection of assets and against liability are the same as with a traditional corporation.
Shareholder is not personally liable for acts by other shareholders but the corporation is jointly and severally liable for employee actions. </li></ul>EX: Nurse under supervision of doctor commits or is accused of negligence. Both nurse and doctor named in lawsuit would be considered professional corporation.<br />
<ul><li>Professionals such as attorneys, doctors, architects, accountants, etc. can create a professional corporation. The exact list of professionals differs from state to state.
In some states Professional Corporations are the only options available, but there are other states that give them the option of either a Professional Corporation, S or C corporation.
Professional Corps can shield owners from liability. Although it can’t protect a professional from his or her own malpractice liability, in can protect against liability from negligence of an associate.</li></li></ul><li>References<br /> <br />Companies Incorporated. (2011). Incorporate - Business types. Retrieved March 6, 2011, from Companies Incorporated: http://www.companiesinc.com/incorporate/businesstypes/professionalcorp.asp<br />Farlex. (2011). Limited Liability Partnership. Retrieved March 8, 2011, from The Free Dictionary: http://legal-dictionary.thefreedictionary.com/Limited+Liability+Partnership<br />Murray, J. (2011). Limited Liability Partnership. Retrieved March 8, 2011, from About: http://biztaxlaw.about.com/od/glossaryl/g/limliabpart.htm<br />Murray, J. (2011). Professional Corporation. Retrieved March 7, 2011, from About: http://biztaxlaw.about.com/od/glossaryp/g/professcorp.htm<br />My own business. (2003-2011). Business Organizations. Retrieved March 6, 2011, from myownbusiness: http://www.myownbusiness.org/s4/<br />SEC. (n.d.). Limited Partnership Information. Retrieved March 6, 2011, from SEC : http://www.sec.state.ma.us/cor/corpweb/corlp/lpinf.htm#anchor454136<br /> <br />