Legal Question in Business Law in New Jersey

You may or may not be exposing yourself to liability with an LLP depending on your state law (some states only extend protection to negligence claims), but your friend is right that you should have formed an LLC or corporation. You may want the help of an attorney to guide you through the process. For that, you can contact my associate Mark at [email protected], as he handles such things for the firm.

Thanks and best of luck!

Under NJ law, a NJ LLP offers the same liability shield as a NJ LLC. If you do business in other states, the shield may not be as "complete." An LLC probably would have been a better choice---for this an other reasons. As far as doing it yourself, I think you answered that question yourself. You didn't have legal advice before you formed the LLP, and that did not work out all that well for you. Lawyers don't know to run a record label, why assume that you and your partner know how to practice law. Yes, you should seek the advice of an attorney. Please feel free to contact me ASAP so that we may explore your options and protect your legal rights. 973-921-0600.

Kindly note and remember that my response is merely a general comment on the law related to your question, and NOT legal advice or opinion. Also, your question and my response does NOT create an attorney-client relationship between us. You cannot rely upon what I have written, because I do not have all of the information that I need to advise you or render an opinion. Even simple facts you have not shared can completely change my answer. For me to give you legal advice or opinion, you would need to hire me to be your lawyer, and then we would need to discuss this in detail and go over the documents.

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An LLP does indeed leave the general partners vulnerable to some extent. Retaining an attorney to dissolve the LLP and from a new entity instead is a good idea. The attorney will help you decide whether the new entity should be a LLC or a corporation. The choice depends on many factors among them whether you intend to bring on investors, the type of investors (individuals or institutional), will you be investing your own capital, will you and your partner be working full time in this venture, the preferred tax treatment etc.