What are LLC's and LLT's?
August 18, 2000
Subject: You said I could ask you a Question
Date: Wed, 28 Jun 2000
From: Joel Williamson
What can you tell us about LLC and LLT's.
I have a friend in a business who has set up a Limited Liability Company and I would like to know more.
It doesn't sound like I could do it, because I work for a company that I don't think would pay an LLC.
Date: 28 Jul 2000
I haven't heard of an LLT. I know about LLCs and LLPs.
An LLC is a limited liability company. It is usually taxed like a partnership but provides limited liability protection like a corporation. I don't have time to get into details, but LLCs usually are particularly suitable for real estate investments. In California we have special taxes that apply to LLCs based on their gross receipts.
(They are becoming critically important to set up "single purpose entities" for securitized real estate financing.)
Some states, like California, don't allow businesses who are required to be licensed by the state, including most professions and construction contractors, to be LLCs.
An LLP is a limited liability partnership. It offers liability protection for a partner from the "errors and omissions" of other partners, but not from his or her own. They are becoming widely used for professional practices, including large CPA firms and law firms.
I don't know why a company would refuse to pay an LLC.
If you are interested in pursuing this further, I highly recommend that you consult with a good attorney. Choosing the form of doing business is a critical business decision, and it can be very difficult to change after the "deed is done."
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