Export Services
Opening a company in the USA
ExportUSA opens US incorporated companies in all of the United States. We can open both LLCs and corporations
https://www.exportusa.eu/opening-a-company-exportusa.php
(+1) 718-5225575
(+1) 718-5225575
The main difference between a Limited Partnership and an LLC is that, while an LP has one class of partners with limited liability and another class with unlimited liability, in an LLC all members have limited liability.
The Limited Partnership (LP) is a business composed of at least one general partner (GP) and one or more limited partners (LPs). The general partner manages the business and assumes unlimited liability, while the limited partners contribute capital and benefit from limited liability up to the amount contributed to the partnership. The Limited Partnership is a pass-through entity, like LLCs, governed by the law of the U.S. state where it is formed. In some ways, Limited Partnerships share certain aspects with Partnerships Limited by Shares under French law.
From a tax perspective, both LLCs and LPs are treated as partnerships by the Internal Revenue Service. However, an LLC can elect to be taxed as a C corporation or an S corporation, an option not available for an LP.
For federal income tax purposes, LPs are generally treated as partnerships under Subchapter K of the Internal Revenue Code. This means the Limited Partnership is not taxed directly. Instead, income, deductions, and credits flow directly to the partners, who report them on their own personal or business tax returns in the U.S.
In LLCs, the organizational structure is composed of members. An LLC can be:
Members can be individuals, corporations, other LLCs, or even LPs.
A Limited Partnership, on the other hand, is composed of a general partner and limited partners. The general partner manages the business, while the limited partners do not have management roles. They are typically passive investors, which is one of the main advantages of the LP structure: they share in profits and losses without taking on operational responsibilities.
Both LLCs and LPs require foundational documents governing the rights, obligations, and interests of the parties:
The formation procedures for LPs and LLCs vary from state to state.
Both LLCs and LPs offer forms of limited liability for partners, but in different ways.
In an LLC, all members enjoy limited liability, regardless of the management type adopted.
In an LP, however:
If instead the business were organized as a general partnership [another common partnership form in America], all partners would have unlimited liability for debts and obligations. A common strategy to avoid the unlimited liability of the general partner is to designate an LLC as the general partner of the Limited Partnership.
Regarding federal taxation, LPs are treated as partnerships under Subchapter K. The entity is not taxed directly: income, losses, deductions, and credits are allocated to the partners. The share of income allocated to each partner retains its character (capital gain, dividend, interest, etc.). The provisions for profit allocation in the Limited Partnership among partners must ensure substantial economic effect, meaning they should reflect the true economic structure of the partners' relationship.
LPs allow active partners to manage operations while passive investors retain limited liability. The structure also preserves the nature of income (including capital gains and qualified dividends) and avoids double taxation.
Limited partners are generally exempt from self-employment tax unless they are materially participating in the business or receiving guaranteed payments for services rendered.
| Differences between LLC and LP | ||
|---|---|---|
| Limited Liability Company (LLC) | Limited Partnership (LP) | |
| Liability Protection | Members enjoy limited liability and are generally not personally responsible for the company's debts or legal obligations. | Limited partners are only at risk for the capital they contributed, while general partners have unlimited liability for the business's debts and obligations. |
| Taxation | An LLC is generally subject to pass-through taxation, but can choose to be taxed as a corporation if it makes the appropriate election. | Pass-through taxation regime: profits and losses are directly allocated to partners, who report them on their personal tax returns. |
| Management Structure | The LLC offers great flexibility: it can be managed by its members (member-managed) or by an appointed manager (manager-managed), as provided by the operating agreement. | General partners manage the business and make operational decisions; limited partners contribute capital but do not have management powers. |
| Formation Requirements | Choosing a name, appointing a registered agent, and filing Articles of Organization with the relevant state. | Filing a Certificate of Limited Partnership with the state and having at least one general partner and one limited partner. |
| Capital Raising | Capital raising through member contributions or new investors; the LLC can also access bank financing and other commercial loans. | An LP can attract new limited partners willing to invest capital in exchange for a stake in the business, without taking on management roles. |
ExportUSA opens US incorporated companies in all of the United States. We can open both LLCs and corporations
https://www.exportusa.eu/opening-a-company-exportusa.php