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An LLP has both general and limited partners. General partners manage the business and are personally liable for the company’s financial obligations. Limited partners are investors in the company with no management authority. Other than their financial investment, limited partners have to personal liability for the company. Often times an LLP is formed with a C or S Corporation as the general partner.
Although the members of an LLC have no personal accountability for the company’s financial requirements, the company may be taxed as a partnership. This mean a member must report any income and deductions on their personal tax return.
When structured as a C Corporation a business is taxed on income and its shareholders are taxed on dividends and distributions they receive. However, the shareholders or owners are not personally liable for the financial obligations of the business.
S Corporations have many similarities to C Corporations except that the company itself does not pay taxes. Instead, shareholders are required to report any income from the business on their personal tax returns.