Question

Form of entity: Limited Liability Limited Partnership (LLLP) (NOT LLP) What is the minimum number of owners and its default tax classification? Does check-the-box apply to this entity?

Answer 1

The limited liability limited partnership (LLLP) is a relatively new modification of the limited partnership. It is a type of partnership that is very similar to a limited liability partnership (LP) in that it has two types of partners, general partners and limited partners.the most common use of limited partnership is for purposes of investment.
LLLPs are a very new type of partnership and aren’t recognized in all states.

•Advantages of a Limited Liability Partnership--
1-An LLLP can do anything that a regular LP can do.
2-General partners have limited liability, and partners are protected from liability if the partnership is sued.
3-The need to use a limited liability entity for the general partner is eliminated.
•Disadvantages of a Limited Liability Partnership-
Compared to corporations and LLCs. Despite offering liability protection for all members, business structures such as corporations and limited liability companies still offer more comprehensive protection..

•Atleast two minimum number of owner are required to start LLLP. and maximum no limit.

.By default, a single member LLLP is taxed as an entity disregarded as separate from its owner (a sole proprietorship), while multiple owner companies are taxed as a partnership,
LLLPs are classified as “pass-through” entities for tax reasons, meaning the business profits and losses will flow through to the personal tax return of each member.
it should file a Form 1065, U.S. Return of Partnership Income.
•the new check-the-box rules are a welcome change from the old complicated classification rules. Indeed, the new rules effectively change entity classification from one of the more complicated areas in the tax law to one of the simplest. This is very good news for all taxpayers,with two or more owners can avoid double taxation simply by electing to be treated as partnerships. If an entity fails to make an election, certain default rules apply and, absent an affirmative election, the new rules will not affect existing entities.