Limited Liability Partnerships
Limited liability partnerships are another option that can be advantageous. A limited partner, unlike a general partner, takes on limited risk and is only liable for her investment and not for the entire business. If, however, the limited partner is a manager, she can be liable for debt. Even in a limited partnership, a general partner is necessary to take on the overall company liabilities. However, the general partner can be a corporation so that no individual is personally liable for the business. Also, limited partners can be replaced, or leave the business, without having to dissolve the partnership, which reduces legal entanglements. To form a limited partnership you must file with your state and pay a filing fee and annual fees.