Limited Liability Companies, Limited Partnerships, and Limited Liability Limited Partnerships
Limited Liability Companies, Limited Partnerships, and Limited Liability Limited Partnerships
You are planning two business ventures. The first venture is a business that will own self-service businesses, such as laundromats, car washes, and warehouse storage. Due to start-up costs and accelerated write-offs of expenses and assets, you expect the business to generate losses in the first year or two, after which it should earn a yearly return on equity of over 20 percent. You prefer to own this business entirely yourself, yet you want to hire someone with experience in the business to do most of the day-to-day operations of the business. While you prefer that person not be an owner of the business, you may be willing to grant a small amount of ownership or a share of profits to her.
The other business venture will purchase and develop 320 acres of land on the outskirts of your city. You plan to construct several commercial buildings on the site and to lease the building space to several tenants. The venture will generate losses during the first four or five years of construction prior to full occupancy of the buildings. You want the business to be owned by members of your family. You want to be the only manager of the business; other family members will be passive owners only. You hope that this business will generate enough income to provide a moderate level of income to every member of your family in perpetuity.
Why is the limited liability company an especially good business form for the first venture?
Why should you choose the limited liability limited partnership for the family-owned commercial development?
