Limited Partnership vs. LLC

If your time is valuable then rely on the experience of a good attorney to set you up right and guide you. If you would rather not pay... go to the book store or a library and learn the difference. You should anticipate problems you might run into.
Time spent now could save you a great deal of money in the future.

By the way you should be aware of how, when and why an attorney or a smart plaintiff can pierce the veil of limited liablity. These entities are nice but frequently they do not help the startup too much. Vendors usually require personal signatures and lawyers can frequently get by them if you have screwed someone over. Nevertheless they are sometimes required, and if implemented properly, and you run the business properly they may give you the insulation you seek.

(Yes, I was a lawyer and I had a client who was never as happy as when we got him dismissed out as a personal defendant halfway through a trial in which he and the corporation he was the president of were being sued for a pretty large sum.) However, he still stressed for a long time up untill that trial... so make sure you observe formalities.
 
Quote from jem:

If your time is valuable then rely on the experience of a good attorney to set you up right and guide you. If you would rather not pay... go to the book store or a library and learn the difference. You should anticipate problems you might run into.
Time spent now could save you a great deal of money in the future.

By the way you should be aware of how, when and why an attorney or a smart plaintiff can pierce the veil of limited liablity. These entities are nice but frequently they do not help the startup too much. Vendors usually require personal signatures and lawyers can frequently get by them if you have screwed someone over. Nevertheless they are sometimes required, and if implemented properly, and you run the business properly they may give you the insulation you seek.

(Yes, I was a lawyer and I had a client who was never as happy as when we got him dismissed out as a personal defendant halfway through a trial in which he and the corporation he was the president of were being sued for a pretty large sum.) However, he still stressed for a long time up untill that trial... so make sure you observe formalities.
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Please also state the total truth here, I too can take down some of the best attorney structured protections with the right jury, sob story, the matching counselor, etc. Let's not give any false sense of security either. I don't think the major tobacco interest that lost the ungodly $26 billion settlement spared any expenses as attorney's go. Having an attorney GUARANTEES you - a legal bill, period.

Handled properly, I too can put together anything a lawyer could. And there are a ton of them out there who will in spite of being on the losing side of a battle, charge the hell out of you to try to get the results you desire. The appeals process is a sewer hole and still no more than a crap shoot.

Some attorney's have their place (I won't take that cheap shot) and they should be relegated to it. There is nothing wrong with a competent, capable entity/person filing their own materials. Ask for legal advice and then act accordingly. Find a mentor who has some experience in that arena that can be valuable and then take the time and interest to learn.

Importantly, read! Understand that you are no attorney therefore more personal research and responsibility is in order. Cut no corners, it's your future business that your arranging. Not only will you have a better understanding of the processes, you will also take down another undeserved veil of fear. :)
 
Canyonman you may have missed the nature of my statements about self education. I wasn't misleading anybody.

And you may have missed the point of an llc. An llc or a corp will not stop people from filing, but it may help you avoid personal liability. And while some of the individuals in the tobacco cases may have committed the type of acts that would allow a plaintiff to pierce the corporate veil, I have not heard of any president or officer being held personally liable. So I guess the lawyers who set up the corporations did a pretty good job huh.
 
So, the truth as usuall, is in the middle between two extremes. I agree, it all depends. If my fund has multiM assets I would go for legal help. There is too much risk then and legal expenses are easier to cover, otherwise you can always sacrifice your time to learn something new, and what is the most important understand what are are you doing.
Now, once all paper job is ready, how do you guys add new clients to your LLC ? Which department must be informed about such changes ? State or County ? I hope that withdrawing is about the same procedure ?
 
Quote from jem:

Canyonman you may have missed the nature of my statements about self education. I wasn't misleading anybody.

And you may have missed the point of an llc. An llc or a corp will not stop people from filing, but it may help you avoid personal liability. And while some of the individuals in the tobacco cases may have committed the type of acts that would allow a plaintiff to pierce the corporate veil, I have not heard of any president or officer being held personally liable. So I guess the lawyers who set up the corporations did a pretty good job huh.
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I think that we both missed each other here then. The reason that I advocate the LLC is to avoid personal liability a little better than with a standard corp. Legal penalties should always prevail for punishment in the courts for wrong doing or mismanagement troubles though.

And the real point is not that the original filing lawyers did a good job, it's that the procedure (when applied properly) provides a protection as the officers were not held personally liable in that instance. It would not have mattered if the filers were attorney's or not if the filing was done properly.

I think it should be more that a lawyer looking for special credit for following the rules here. I would be willing wager that the tobacco corporation filing was nothing special nor did it contain any provisional language for major lawsuits or executive protections. Just a standard corporation filing, pre LLC! Multi-millions at stake, find an attorney and pray. Otherwise, file it yourself, and pray! :)
 
Quote from ChrisM:

Now, once all paper job is ready, how do you guys add new clients to your LLC ? Which department must be informed about such changes ? State or County ? I hope that withdrawing is about the same procedure ?
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Just as with a regular corporation. Unless you desire something out of the ordinary at which point you SHOULD seek legal advice as you may be weakening your protections in doing so. :)
 
Quote from canyonman00:



Just as with a regular corporation. Unless you desire something out of the ordinary at which point you SHOULD seek legal advice as you may be weakening your protections in doing so. :)
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Right from the beginning ? No way, there is so much to learn first:D
Another (para)legal issue:
Do you do your corporate taxes yourself ? Corporate tax seems to be quite complicated, but CPA are not that costly as lawyers ?

And one more: what about corporation S versus C, does it have anything to do with us ?
 
Quote from ChrisM:




Right from the beginning ? No way, there is so much to learn first:D
Another (para)legal issue:
Do you do your corporate taxes yourself ? Corporate tax seems to be quite complicated, but CPA are not that costly as lawyers ?

And one more: what about corporation S versus C, does it have anything to do with us ?
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Pay for the accounting if you don't mind. I still do most of my own accounting things in general (or should i say, my bookkeeper does). But accountants are no where near as costly as lawyers. We take our accounting stuff over quarterly for the accountant to verify and review.

We have yet to have a problem with this as our software and postings have been very good. So much so that my accountant is now one of my computer equipment/software clients. He was so impressed with our accuracy, documentation, record keeping and timeliness that he asked us to overhaul his capabilities about a year ago.

About the S or C issue, it does not pertain to you in this LLC corporation instance. :)
 
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