oversaw day to day management; they worked for the business full time; and they were held out to the public as essential to the business. Their capital accounts make clear that their earnings were not of an investment nature and constitute net earnings from self-employment.” Important: Limited partnerships are complex and must comply with statutory requirements, including tax and securities laws. Professional legal and accounting advice is strongly recommended. Limited Liability Partnership (LLP) and Limited Liability Limited Partnership (LLLP) A Limited Liability Partnership (LLP) is a general partnership that registers for limited liability protection with the Minnesota Secretary of State. Key features: • Protects individual partners from personal liability for certain debts and obligations of the business. • Must file a Limited Liability Partnership registration and an annual renewal to stay active. • The name must include “ Registered Limited Liability Partnership ,” “ Limited Liability Partnership, ” or an abbreviation such as LLP , RLLP , or L.L.P . A Limited Liability Limited Partnership (LLLP) is a limited partnership that elects limited liability protection for all partners — both general and limited — under Minn. Stat. Chapter 321. The name must include “ Limited Liability Limited Partnership ” or “ LLLP. ” Corporation A corporation is a separate legal entity owned by one or more shareholders. It offers strong liability protection because the corporation, not the owners, is responsible for its debts and obligations. Key features: • A corporation is formed by filing Articles of Incorporation with the Minnesota Secretary of State in compliance with Minn. Stat. Chapter 302A. • Shareholders elect a board of directors that oversees management. • The corporation, not the shareholders, is responsible for business debts and obligations. • Owners (shareholders) who work for the business are employees — subject to payroll taxes, withholding, and employment laws. • Must maintain corporate records, hold annual meetings, and follow formal procedures. Corporations may be taxed under Subchapter C of the Internal Revenue Code (a “C corporation”) or the provisions of Subchapter S of the Code (an “S corporation”). Minnesota tax laws provide for comparable treatment.
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