Question

Sally and Alicia currently are general partners in a business located in Atlanta, Georgia. They are content with their current tax situation but are both very uncomfortable with the unlimited liability to which they are each subjected. Which form of business entity should they consider to replace their general partnership assuming they wish to remain the only two owners of their business

Answer 1

Limited liability company is a distinct legal entity where members can held personally liable for the debts and liabilities for the company. Limited liability partnership combines characteristics of a partnership or corporation or sole proprietorship.

As in the given case, both sally and alice are uncomfortable with current tax situation as both are suffering with unlimited liability. it is better for them to opt limited liability partnership where in which persons are not held personally liable.