Llp

[crud3w4re]

With an LLP, will it be easier to obtain loans? And do my members need to be in the same state? Or country? My company is a bit .. different: It's primarily based on building a network of profitable websites [as we are doing] revenue sharing equally, and we're also looking to start / buy some online businesses, we're currently planning out a new webhosting co. It would be a "subsidiary", though, we'll be running it as a F/T business.

We're always on the look out for investors / developers to either:

a. join the company / upon majority vote

or

b. loan us / contract them to aid in our more ... difficult projects.

It has been going for 2 months, it's like a hobby almost, but I like being able to take a company into various different business opportunities. Do you think I'm going about it the wrong way? We're also interested in offline opportunities, but not as much, it's cheaper / easier to manage things when it's internet based, and when members aren't near.

[akula]

are u looking for advice regarding an llp or an llc, or both?

[crud3w4re]

hm LLP. I have two members, but they don't live in my state.

[akula]

With an LLP, will it be easier to obtain loans?

legal structure can often help to improve creditworthiness.

for example, a sole trader can improve their credit worthiness by registering a company and borrowing money in the company's name. this approach works because it seperates the liabilities of the soletrader (i.e. mortgage, car payments, cc balance) from the balance sheet of the company

can an llp improve credit worthiness? not likely. the personal liabilities of the partners still carry on to the balance sheet of the llp. however, one way to improve credit worthiness is to get guarantees from the lp

[crud3w4re]

Guarantees? Assets? Collateral?

[akula]

is there a follow on question?

sorry, i can't read your mind :-)

[crud3w4re]

lol what did you mean by "guarantees"? I thought you meant collateral/assets by that. Well, let's put it this way: I'm involved/interested in various different businesses, most of them online based. I don't want to start a corporation, too much paperwork to keep. I don't want to be an LLC, I have members interested, and I enjoy attracting new [potential] members.

Right now we are building profitable websites that generate automatic income, while we work on our webhosting venture. Can an LLP own subsidiaries?

[crud3w4re]

okay then. Any tips for starting up subsidiaries? I'm thinking if we successfully launch / run this webhost, that we would like to own it .. but not run the day to day. Is that at all possible? I'm optimistic about that. We can shell out the money to run a webhost, so it comes down to uniqueness, and marketing. We're good at coming up with / implementing new strategies, so that would be the fact that led me to that question.

thanks

[akula]

what I meant by guarantees is a situation where the GP attempts to improve the creditworthiness of the LLP by getting the LP to guarantee the repayment of any liabilities to the lender in case of default by the LLP

yes, the LLP can buy securities in companies, but they will be owned in the name of the GP

I dunno...what problem are you trying to solve by asking these questions?

[crud3w4re]

Just trying to understand it more. What's a "GP"? Can an LLP have a credit rating?

[akula]

GP = General Partner

He is personally responsible for the liabilities of the LLP

He is paid by the LPs to manage their capital for them

The title is what the CEO is to an LLC (i.e. "the boss")

The gp will in most circumstances have the largest of the LLP carry (i.e. profits)

No, an LLP, as far as I know, can't have a credit rating. Any loans will be drawn against the GP personally and it is his credit rating which is used during diligence

[crud3w4re]

hm thanks for the info. Why do they call it "limited liability" when the GP is liable? Kinda deceives you. Is it the same way with LLC's / the owner being the gp, right?

[akula]

okay then. Any tips for starting up subsidiaries? I'm thinking if we successfully launch / run this webhost, that we would like to own it .. but not run the day to day. Is that at all possible? I'm optimistic about that. We can shell out the money to run a webhost, so it comes down to uniqueness, and marketing. We're good at coming up with / implementing new strategies, so that would be the fact that led me to that question.

thanks

subsidiaries are legal instruments used to correct certain kinds of legal/operational problems. if these problems don't exist, there is no need to have subsidiaries

errr...i'm not sure i understand what issue you're trying to raise

so you wanna start a webhost? you're not sure how to do it? am i in the right ball park?

[crud3w4re]

Nah. We know how to run a webhost, but I was wondering if down-the-road would it be possible to "install" people to run it? Similar to installing a puppet government in a country.

In other words, can an LLP own companies?

[akula]

hm thanks for the info. Why do they call it "limited liability" when the GP is liable? Kinda deceives you. Is it the same way with LLC's / the owner being the gp, right?

good question. in an LLP, the limited liability extends to the LPs (limited partners). they are the equivalent of shareholders in an LLC.

no, not really. LLC don't have GP's. they have management (CEO, CFO etc), shareholders and directors. Most of the time, however, these there roles are carried out by the same person. Anyhow, it is the shareholders who are the owners of the company.

likewise, in an LLP, it is the LPs who are (strictly speaking) the owners...although they don't exercise any active involvement in how their capital is managed...that's what they pay the GPs for.