Limited Liability Partnership - Your opinions please

[kevlives]

Just about to open one
Pro's and Con's if you please
Thanks in advance

 

[Ozzy]

First question... why are you thinking about an LLP? What is your train of thought to think why you need one, and what will you be doing in this LLP?

 

[kevlives]

Planning on opening an auction site similar to Ebay
So far I have been able to cover the costs as a hobby almost but now I need to get things like business accounts and registering the company ( there are two of us) so a limited partnership sounds good so the company can start trading
Sorry If I seem a bit of a newbie to this.

 

[MikeH]

The discussion is a little more complicated than great or bad. My first point that I would raise is why are you about to start one if you do not know whether this is the correct type of business vehicle for you?

There are many similarities between LTD's and LLP's. At the same time there are some significant differences.

If you need some inforamtion on LLP's follow this link to our site. It is an information page and provides some basic information regarding the benefits and considerations of choosing LLP's.

http://www.sfsgo.com/Whatisanllp.asp

If you have any specific questions please feel free to ask.

Mike.

 

[MikeH]

OK so it's an auction site. Are you expecting to be busy immediately? Do you think that you need to protect your liability? You could just operate as partners and get a partnership agreement drawn up, after all you will need one as an LLP.

Mike.

 

[Sally Bacchetta]

Freelance writer and small-business owner here, and I'm glad you're talking about LLCs. I have (or had) the impression that LLC is a way to protect personal assets, but I was recently told that's not true, and that LLC offers no more "real protection" than sole proprietorship. Is that right? If so, what are the advantages of LLC? Thanks in advance for any info on this.

Sally

Sally Bacchetta - Freelance Writer
http://www.sallybacchetta.com

 

[kevlives]

OK so it's an auction site. Are you expecting to be busy immediately? Do you think that you need to protect your liability? You could just operate as partners and get a partnership agreement drawn up, after all you will need one as an LLP.

Mike.

Thanks Mike, I will be expecting a very slow start as the flow of traffic on the site will be minimal to start.

With Regards to my liability what exactly is my liabililty, Is it my assets, the amount of money I have put in....... again I'm abit new to this :?

My situation is that I am lodging so I dont own/rent a property at the moment and I have a loan with a bank
When the business takes off(Fingers crossed and all that) I will need to protect things like the company name/ domain name.

I am not planning on holding any stock/money with the view of the customer.
I essentially will be selling the space to advertise just like Ebay

Thanks for that link - very informative about LLP's

 

[MikeH]

Forming an LLP (not an LLC - that is an American company) or an LTD limits your liability. What this means is that should something happen to your business, for example you get sued in the courts, then your liability is limited to the money that you have invested in the business. This cannot be said of a standard partnership with a friend/associate or a soletrader business. In these cases it would be you personally that is persued in court not the company or LLP.

I appreciate that I have given a basic example but the point is to demonstrate how you can protect your liability. However, my earlier post suggested that you may not need this kind of protection. Therefore, you could just start business and see if you need to form a company or LLP later.

To protect the domain name, get it registered. You may want to consider registering some of the variables (.com, .co.uk, .net etc. if you think it will be that neccesary). Ozzy could probably help with that. To protect your company name, yes you could form a company or LLP to protect it. If again though you believe that the name requires protecting properly you will need to consider trademarks ('crossguard' on this forum is very helpful with this).

I hope that this helps.

Mike.