The Limited Partnership as a Choice of Business Structure
Introduction to Business Structures
Second to the operation itself, choosing the correct business structure is potentially the most important decision that any businessperson can make when strategizing a startup. Proper structuring can provide significant shelter from taxes while limiting the liability through protection against legal claims and judgments. On the other hand, devising a less than efficient organizational structure can spell doom for the otherwise successful venture. There is no structure that provides total immunity or security. Likewise, corporate blueprinting is not for the purposes of bypassing ethics or one’s duty of care. Although it may not protect the entrepreneur from every unforeseeable accident, the right structure can limit losses while creating extraordinary tax advantages.
Beyond the limited partnership and corporation as choices of business structure, which will be outlined in more detail below, there are several other potential structures that businesspeople may consider. A proper understanding of all of the options will ultimately lead to crafting the best business blueprint. Briefly stated, there are two broad divisions of structures: unincorporated organizations and incorporated organizations. Unincorporated entities generally include sole proprietorships, general partnerships, limited partnerships, and limited liability partnerships. Incorporated structures often consist of C corporations, S corporations, closely held corporations, and limited liability companies. The different structures each have their own advantages and disadvantages for different firms in varying types of industries. These include their in ...