/Biz/ My friend and I have been working on a couple products that we have engineered and designed. We are thinking about starting an LLC, getting a Federal Tax ID and business certificate.
What are the advantages of a LLC vs an LLP. Any startup company advice would be greatly appreciated.
Realistically a properly set up LLP is around 30k. Partnerships are one of the oldest legal structures with centuries of case law behind them. They offer privacy, and flow through taxation, generally. They are an extremely flexible legal structure. You can right pretty much anything into it and get very creative.
The LLC you can elect your tax structure, Sole, Partnership, Corp, S-Corp. Legally it is less mature, so judges have significant more leeway in setting judgements. LLCs have been gutted in some states.
However they are significantly cheaper to set up and maintain as an owner operator. Most people select partnership taxation.
Generally you start with the LLC and if you break, the 6 figure/ year mark, you revisit the structuring.
LLP's are more secure.
LLC's are cheaper, but vary in their protection across states. However, you can register in the strong states and be an alien entity in yours and be tried according to the laws of the strong state.