Legal Question in Business Law in California

Re: Home Business

You may be referring to a limited liability company or LLC. An LLP can only be formed by accountants, attorneys and architects. An LLC can be formed for most other types of businesses, but there are some limitations. For example, a licensed contractor cannot do business as an LLC.

Both LLCs and corporations are considered separate entities from the owners and both offer personal asset protection. However, you should consult with a CPA regarding which is better for you for tax purposes. In my opinion, an LLC and a small corporation are equally easy to manage and the determining factor on which entity you choose will likely be the tax treatment.

Feel free to contact my office if you wish to discuss this matter further.

Re: Home Business

Generally a Limited Liability Partnership (LLP) (or an LLC Limited Liability Company) will serve to protect the owners of the company or partnership.

There are, however, exceptions to this similar to the exceptions that exist for seeking recovery against the owners of a corporation.

You should discuss your options with an attorney if you are being sued.

Re: Home Business

In California, LLPs may only be formed for the practice of lawyers, architects and CPAs.

While the answer to your question, as asked, is "generally, yes," it must be noted that if you are thinking of forming a liability-limiting business entity for most types of business activity, your choices are a corporation, a limited liability company (LLC) or possibly a limited partnership (LP) but not a limited liability partnership (LLP).

These business entities will protect their owners from personal liability so long as the entity is properly formed, reasonably well operated according to the rules for each, and the owners avoid fraudulent activity.