A South Carolina limited liability partnership (LLP) is a business entity in which partners have limited liability. As such, it has some characteristics of partnerships and corporations. In a South Carolina limited liability partnership, one partner is not liable for another partner’s wrongdoing or negligence. In an LLP, these partners have limited liability similar to that of the shareholders of a corporation. A limited liability partnership is like a general partnership in that both business entities require more than one owner, but unlike a general partnership, a limited liability partnership offers the owners of the business limited personal liability for certain business debts.
According to the South Carolina Uniform Partnership Act (1997), a partnership may become a limited liability partnership. A limited liability partnership is relatively easy to set up and is treated like a general partnership for tax purposes. This is one of the advantages of setting a partnership as a LLP: there is no double taxation like corporations are subject to double taxation.
South Carolina Limited Liability Partnership v. Limited Liability Company
Both the South Carolina limited liability partnership and limited liability company (LLC) require filing Articles of Organization with the Secretary of State. The information required for this filing is similar: the business name of the LLP or LLC, its business activities, and the contact information. In both limited liability partnerships and limited liability companies, the owners, which are called “members” in LLCs or “partners” in LLPs, are typically not personally liable for the debts of the business. As to taxation, unlike corporate double taxation in which corporations must pay taxes for profits and then the owners pay taxes again on their distributions, both LLPs and LLCs pay taxes only once because both are pass-through tax entities.