Structuring Your Business – Limited Liability Partnerships versus Limited Liability Companies

Wheaton business law attorneysThe structure of a business is more than just a critical element; it is what dictates nearly every aspect of the business. Sadly, too many business owners fail to give the decision of how to structure their business enough thought, which can place them and their partners and investors at risk for legal and financial consequences. Discover how even the smallest of differences in structure, such as those seen in limited liability partnerships (LLP) and limited liability companies (LLC), can make all the difference in the future stability of your company, and learn how an experienced Illinois business law attorney can assist you in making the right decision for your company’s needs.

Examining the Similarities Between LLPs and LLCs

For the most part, LLPs and LLCs are formed, structured, and treated the same. Each provides the partners with a “pass-through” option on their taxes, which allows them to avoid the “double taxation” that corporations are required to pay. LLCs and LLPs also handle partner buy-in and sell-out in a similar fashion, and neither has a limit on the number of partners that the business can have. Because of this, LLPs and LLCs have become quite popular among businesses that might have otherwise been forced to register as a corporation.

Understanding the Differences Between LLPs and LLCs

Although there are many similarities between LLPs and LLCs, there are also some distinct and important differences. First, an LLC does not offer partners the same level of liability protection as an LLP, should a lawsuit or some other legal action take place. Instead, all partners may be held equally accountable in an LLC. In contrast, an LLP is only required to have one managerial partner. All others can receive protection from the actions of managerial partners, provided they do not take on a managerial role themselves.

Business owners should also understand that they cannot always structure the company however they want. Some states have specific restrictions. For example, Illinois does not permit banking or insurance institutions to form LLCs. Instead, they must structure as either a corporation or an LLP.

Contact Our Wheaton Business Law Attorneys

At Stock, Carlson, Oldfield & McGrath, LLC, we understand the difficult decisions that start-up businesses must make, such as those that pertain to business structure. Dedicated and experienced, our Wheaton business law attorneys can assist you and your partners in making the most sensible choice for your company. Call 630-665-2500 and schedule your personalized consultation today.





Steps to Dissolving a Business

Illinois business law, federal business laws, Illinois business lawyer,If you are considering dissolving your business, there are many things to be aware of before you begin the proceeding. The first is that you should speak with a business attorney to determine the bests steps to take and whether or not your business is applicable for tax breaks and what financial legal burdens you have to handle before you walk away. Also be aware that you have to file an annual tax return for the year that you go out of business, even if your business closes in the first quarter. Other financial burdens that must be resolved include the closing of all accounts and the resolution of all business debt.

These tax returns are in addition to the reports that you must file to officially dispose of your business, which must be filed no matter what type of business you operate. This is true for a corporation, S corporation, LLC, or trust. If you fail to file these dissolution papers, you could still be liable to pay taxes and filings. If you are operating as a partnership or sole proprietorship, you may not be required to fill out these dissolution papers. If you have any question as to whether or not you should file these, it should be discussed with a legal professional.

Another major step is to make sure that you have canceled all registrations, permits, licenses, and business names. This ensures that you will no longer be responsible for any additional payments and responsibilities. Most of these filings will be done at the state or local level, which is why it is important to work with a legal professional who is in your area and familiar with local laws.

The next step to closing a business it to make sure that you have complied with all employment and labor laws. The Worker Adjustment and Retraining Notification Act (WARN), for example, requires that all employers who have 100 or more employees provide at least 60 days (two month) written warning that the business will be closing.

If you or someone you know is considering closing a business, the most important step is to seek legal counsel. Contact an experienced DuPage County business attorney today. Call the Law Office of Stock, Carlson, Oldfield & McGrath LLC 630-665-2500 to schedule a consultation.