What is a Limited Partnership?
In a Limited Partnership, there are two different kinds of partners, general and limited. The general partner, who runs the business, has the personal liability for all debts, while the limited partners, who are basically passive investors, can lose no more than their stake in the partnership. All profits from the business are filed on each partners' personal income tax statement. As with a sole proprietorship, you must still comply with local registration, business license and permit laws.
What is a Limited Liability Corporation?
A Limited Liability Company, commonly called an "LLC" is a business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation. Like owners of partnerships or sole proprietorships, LLC owners report business profits or losses on their personal income tax returns; the LLC itself is not a separate taxable entity. Like owners of a corporation, however, all LLC owners are protected from personal liability for business debts and claims - a feature known as "limited liability." This means that if the business owes money or faces a lawsuit; only the assets of the business itself are at risk. Creditors usually can't reach the personal assets of the LLC owners, such as a home. Like corporations, a LLC must be registered with the Secretary of State of Georgia.