Limited Liability Partnership - Essay Example

This business entity will be registered in the US under the state laws of the country. As an entrepreneur, I have identified two other investors who have a similar objective of establishing a social communication company in the US that will link up people through a website. In order for people to communicate, they will have to register and give their personal details that will differentiate them from other persons. Under this communication platform, we will earn our income from advertisements, which are posted, on our websites.

This means that the higher the number of registered social networkers, the greater the outreach of advertisements. We intend to have a global presence and a minimum of 250,000 registered people by the end of the first fiscal year. To achieve our noble idea, we have decided to form a partnership business with the two investors. We will register our partnership business under the Uniform Partnership Act of 1996 that govern partnership businesses in the US. Our business will be a limited liability partnership that will strictly follow the regulations laid by the Act.

Limited liability partnership has several advantages that have fascinated us to form a partnership business. Under the limited liability partnership, all the partners in the business will be limited depending with their individual contributions to the business. In the partnership agreement, we have decided that each partner will contribute equally to the business. This means that the amount of liability will be treated equally to all partners. Moreover, the profits and losses will be shared equally to the partners.

Besides, all partners should participate equally in management of our partnership business in order to achieve our vision, mission, goals, and objectives. Various factors have riveted us to form a limited liability partnership. Limited liability partnerships are advantageous in that they are easy to establish and manage as compared to corporations and companies. Limited liability partnerships require no minimum capital to be established as compared to other forms of businesses, such as companies and corporations.

The partners in the agreement decide the amount of capital in this form of business. Limited liability partnerships have few legal formalities required to establish the business. For instance, a few numbers of partners, 2, are required to form the partnerships as compared to a company’s 50 members. In management of our partnership business, designated partners, who are in charge for ensuring the compliances of all applicable laws, will manage daily operations of limited liability partnership.

Limited liability partnerships are advantageous in that the partnerships are treated as separate legal entities from their owners. This means that the partners cannot be sued individually for the liabilities resulting from the partnership. This means as limited liability partners, we are obliged to take responsibility of the partnership business through proper management. Furthermore, limited liability partnerships and their members are treated as distinct and separate from each other (Bouchoux 34).

These depicts that a partner will be accountable for the duties bequeathed upon them by the partnership. Additionally, partners in this form of business organization are not held responsible for the acts of other partners and their personal assets are treated separately and never exposed unless there is a case of fraud. Limited liability partnerships are flexible as compared to companies. Flexibility of limited liability partnerships is brought about by the minimal legal requirements to establish the partnership.

Such an example is the minimal amount of capital required to