Asset Protection
Limited Partnerships
A limited partnership is comprised of one General Partner and one or more Limited Partners. The General Partner is the only one who controls the partnership, its assets and its wealth. Now remember, assets are anything with value; this can be real estate, investments, cash and even art, cars, boats and airplanes.
Limited Liability Companies
A Limited Liability Company (LLC) is another vehicle for protecting your assets and is more sophisticated than a Limited Partnership. In comparing an LLC to a Limited Partnership there are two distinct differences. In a Limited Partnership, the limited partners cannot participate in managing the business, in an LLC they can. In a Limited Partnership the general partners are personally liable for business debts, in an LLC, all owners get the benefit of limited liability protection from business debts and claims.
Corporations
Through the corporation you have limited your liability and gained a great deal of privacy and protection. Perhaps you start your corporation with as little as a $1,00 investment and that initial capital would be the limit of your exposure to any lawsuits or judgments. Thus your first level of protection for your small business is to incorporate. A corporation offers many tax benefits, unlike a sole proprietorship.
Steven Sears, CPA, Attorney
18 Truman ~ Irvine, CA 92620
Phone (949) 262-1100 ~ Fax (949) 262-1202