What is a limited liability partnership?
A limited liability partnership (LLP) is a type of business formation under the laws of Washington. This type of business structure is similar to the traditional partnership but offers the partners some legal protection from any debts, lawsuits, or other liabilities of the business. In Washington, an LLP is formed when two or more individuals enter into an agreement to provide services in a trade or business. One of the main benefits of this type of business structure is that it shields the individual partners from liability for the debts, obligations, and liabilities of the partnership. This means that if the business fails, the partners’ personal assets are not at risk to settle any debts. For tax purposes, an LLP is treated as a partnership, so the profits are split between the partners and reported on each individual’s personal tax return. The LLP does not pay taxes on the profits earned. Forming an LLP involves the filing of registration documents with the Washington Secretary of State and may involve the filing of other documents with the state or local authorities. You should also consult an attorney to ensure that the formation of the LLP is in compliance with the laws of Washington. Overall, establishing a limited liability partnership can protect the partners from personal liability for business debts and obligations while also providing flexibility in how business profits are taxed. Considering the personal protection and tax benefits, this type of business formation can be a useful option for individuals looking to go into business in Washington.
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