To grasp the importance of the new Idaho LLLP business you must first understand the problem that it solves.
We must first begin with describing the limited partnership (LP). The LP is a type of partnership that has one or more general partners, and one or more limited partners.
- The general partners manage the LP, while the limited partners are only involved financially and are excluded from management.
- A major disadvantage is that general partners are severally liable for the partnership’s obligations, although limited partners are protected.
In the past, many Idaho businesses created an LLC or corporation to serve as the general partner to eliminate their individual and unlimited risk.
Thus, the creation of a limited liability limited partnership (LLLP) eliminates the need for this strategy.
What is an LLLP?
An LLLP is a type of limited partnership, however, unlike in an LP, LLLP general partners’ liability for LLLP debts or obligations is limited.
- An LLLP can do anything that a regular LP can do.
- General partners have limited liability, and partners are protected from liability if the partnership is sued.
- The need to use a limited liability entity for the general partner is eliminated.