LLP? LLC? Help

[kdt26417]

I'm so confused about these business terms; I've looked them up in Wiktionary and Wikipedia but all I get is a mild headache from going cross-eyed and bug-eyed. Does anyone know how to explain any of this stuff in layman's (read: dummies like me) terms? What's the difference between an LLC and an LLP, anyway? Pros and cons?

A bit more explanation, so that I won't be misunderstood: The acronyms stand for Limited Liability Company and Limited Liability Partnership, and they are legal entities that, from what I've read, are sometimes created by poly families to serve as substitutes for the contract and protections of marriage.

I've often heard them talked about (and recommended), but I don't grasp them beyond what I've described in this post. So this thread is for my information/education (and may help others as well).

[km34]

Here is a handy chart. That's the best I could find with a quick google search!

[kdt26417]

Thanks km34; any information is of help, as I'm a little dense on this subject.

[km34]

Yeah, I tried reading a bit of it, and it went right over my head! Good luck!

[nycindie]

I have an LLC for my business but I am unclear as to how people would form one for relationships. I remember coming across a website about this last year, written by some poly peeps who advocate for doing so. I tried to find it again but no luck. If I do find it, I will add it here. I would think some form of corporation might work better than an LLC but, I also don't know much about LLPs.

[drtalon]

IANAL. The lawyers I heard presenting at Atlanta Poly Weekend 2012 suggested trusts are the best way to collectively share assets while protecting the group and its assets from legal action against individual members. Another thing I overheard is that LLC's provide very little protection because it is usually very simple to pierce the corporate veil with LLC's used in such ways.

[KyleKat]

Having briefly studied LLC when registering my own business, I would have to recommend against using that type of arrangement for your personal life. That's a lot of headache for not a lot of protection. A simple lawyer drafted contract is much cheaper, only requires updating when you make changes (instead of yearly filings) and is overall much more simple. Your will needs to be in order, and you should arrange for living agreement contracts if you plan to live with multiple people. People should do this with roommates too. I never understood why people didn't set that up. Written contracts for everything in life, people.

[kdt26417]

Re (from drtalon):

"The lawyers I heard presenting at Atlanta Poly Weekend 2012 suggested trusts are the best way to collectively share assets while protecting the group and its assets from legal action against individual members. Another thing I overheard is that LLC's provide very little protection because it is usually very simple to pierce the corporate veil with LLC's used in such ways."

Hmmm ... interesting.

Re (from KyleKat):

"I would have to recommend against using that type of arrangement for your personal life. That's a lot of headache for not a lot of protection. A simple lawyer drafted contract is much cheaper, only requires updating when you make changes (instead of yearly filings) and is overall much more simple."

Interesting indeed. I feel perhaps not much smarter, but somewhat wiser.

Re (from KyleKat):

"Written contracts for everything in life, people."

Sounds like good advice to me.