Welcome

We are not professionals, nor should any of the content here be used without professional validation to make decisions for your situation. Since entries appear with the most recent on at the top, if you would like to read in a chronological order start at the bottom.

If you feel that the experience shared here has helped you save time and money please consider donating to help spread the costs of acquiring it. Any contribution is appreciated. By way of thanks, anyone who donates will receive bonus materials:

- Current copy of detailed notes

- A sample accounting spreadsheet we use instead of costly accounting software

- A sample Statement of Qualification and Operating Agreement for an LLP

Thanks and good luck with your property!

Monday, January 9, 2012

LLP or LLLP?

A few readers have asked whether an LLP or an LLLP is the better choice for holding and renting property. Limited Liability Partnership versus Limited Liability Limited Partnership. I am no expert on the differentiation.

We chose LLPs. Our reasoning at the time was that we were trying to provide liability protection for the partners (in this case a couple) as a group rather than protection for the "limited liability partner" from actions of the "general partner". We wanted both partners to be involved and agreeing on partnership decisions, rather than one partner managing the activities and the other being a silent investor.

Here is a site that discusses the options: http://www.referenceforbusiness.com/encyclopedia/Oli-Per/Partnerships.html#b

Any experts out there that can comment?
Posted by at

2 comments:

  1. AnonymousJanuary 18, 2012 at 7:24 AM

    After reading the link you posted, it seems that by using an LLP, you have protected yourself from any malpractice suits against your wife and your wife has been protected against any malpractice suits against you. However, you are both still liable personally for anything you do. I don't really see any advantage of using an LLP over buying the property personally.

    ReplyDelete
  2. Jeff GallowayJanuary 30, 2012 at 3:42 PM

    In most cases, LLP is the best for a couple as you stated. LLLP is better for partners that don't have legal right to each others assets. However, there are other situational factors to consider that could change the optimal structure, such as marital status, state laws, and how much of the time the property will be rented.

    The benefit of using an LLP or LLLP over buying it personally is to avoid double taxation.

    Jeff Galloway
    jgalloway@southboundconsulting.ca
    www.southboundconsulting.ca

    ReplyDelete

Subscribe to: Post Comments (Atom)