The characteristics of a partnership and a limited liability company are combined to form a limited liability partnership (LLP), a type of business organization. All partners are provided with liability protection through an LLP while still being able to take part in business management. Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, and South Carolina are among the states that permit LLPs.
If you are a member of a professional partnership, such as an accounting firm or law firm, you might want to consider an LLP instead of an LLC. Since the conduct of one partner can have an impact on the entire company in these situations, liability protection is particularly crucial. Compared to a conventional partnership, an LLP provides greater security while still enabling full participation from all partners in business management. An LLP has the added benefit of often being easier and less expensive to set up than an LLC. Less paperwork needs to be completed, and partners are generally free to run the business however they see fit without having to bother about formal meetings or votes on important issues.
However, there are also drawbacks to an LLC. For instance, LLCs may cost more to establish and keep up, and they could also demand more formality like regular meetings and votes on important decisions. Additionally, when it comes to management structure, LLCs might not be as flexible as an LLP.
LLCs in Ohio must renew their state registration by submitting an annual report and paying a fee. Although it is a quick process that can be finished online, it is crucial to remember to complete it annually to prevent fines or having your LLC suspended.
And finally, in order to register any kind of business with the IRS, an Employer Identification Number (EIN) must be obtained. Although getting an EIN is free in Ohio, several businesses offer to handle it for a fee. It’s crucial to only work with respectable businesses and to stay away from any who demand exorbitant prices for this service.
In conclusion, professional partnerships seeking liability protection while preserving a partnership structure may find success with an LLP. However, LLCs could provide greater flexibility and necessitate formalities. Ohio LLCs must reregister each year, and while acquiring an EIN is free, it is recommended that you choose a reliable source.
Technically, having an LLC without a business is possible. A range of purposes, including holding assets or managing investments, might lead to the formation of an LLC. It’s crucial to keep in mind, though, that incorporating an LLC without a clear commercial purpose can not offer the same level of legal security and tax advantages.