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Richard, Attorney
Category: Business Law
Satisfied Customers: 55594
Experience:  32 years of experience practicing law and a businessman.
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We are planning a new business, looking investors that

Customer Question

We are planning a new business, looking for 30 investors that will be silent partners, they will invest $200,000 each. They are qualified investors. Should we form an llc or do a limited partnership, they do not want any exposure other then their investment
Submitted: 2 years ago.
Category: Business Law
Expert:  Richard replied 2 years ago.
Hi! My name is ***** ***** I look forward to helping you!
Either format will work for you. Both entities are limited liability entities so your investors will have no liability beyond the risk of the loss of their investment. Both are flow-through entities so there will be no double taxation. And, both allow the flexibility of preferential allocations and distributions if you plan on providing any kind of such preferences to your investors. The one advantage of an LLC is that you don't then have to form another entity to act as the general partner so that you don't have individual liability as the individual general partners.
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