Popular Forms Of Business Formation
When considering how to incorporate a new business, a qualified Houston, TX CPA firm like Abraham Business Solutions, P.C. can explain the unique tax and legal implications. We’ll carefully evaluate your business and help you decide which type of entity best suits your needs. Some common forms of incorporation are:
Limited Liability Partnership (LLP)
An LLP includes general partners who have management authority and limited partners who invest cash in the company. General partners have personal liability for the firm’s obligations, while limited partners are liable only for their investment. A Limited Liability Partnership is commonly formed with a C or S corporation as a general partnership, and it is not a separate tax-paying entity.
Like a C corporation, an S corporation is a separate legal entity, but it differs in that while shareholders are taxed on income they receive from the company, the corporation itself is not taxed. However, a company must meet strict legal requirements to qualify as an S corporation.