LLCs vs. LPs in Syndication and Equity Funds: Navigating the Choices

If you're considering becoming a sponsor for a syndication or equity fund, you'll want to understand the differences between using a Limited Liability Company (LLC) or a Limited Partnership (LP) as your entity structure. Two decades ago, LPs were the norm, but today, most sponsors opt for LLCs. There are three main distinctions to consider: taxation, management, and liability protection. With an LLC, taxes are passed straight through to partners, while an LP treats general and limited partners differently. LLCs offer more management flexibility and clear liability protection for the general partner, whereas an LP's general partner has full control but no inherent liability protection. LLCs also have an easier formation and maintenance process. Still, LPs can offer specific tax benefits and a clear distinction of roles. In most cases, an LLC is the recommended choice, but unique circumstances might favor an LP.

Read more about real estate syndication - How To Syndicate Real Estate: https://www.moschettilaw.com/how-to-syndicate-real-estate/

Read more about the SEC and Reg D - The SEC And It’s Reg D: https://www.moschettilaw.com/sec-reg-d/

Moschetti Syndication Law Group is a boutique syndication law firm, serving small and growth-bound syndicators, as well as private equity firms. Our attorney, Tilden Moschetti, is determined to keep the firm’s ‘boutique’ size so we can tailor the services to each client’s unique needs without turning the firm into a faceless factory churning out private placement memorandums or passing unnecessary overhead expenses onto our clients. (As our client, you’ll only pay a fixed fee, so no surprises.) As for the client experience, we give real-time answers with Tilden Moschetti without making you book an official appointment or get passed along to associates or paralegals. We’ll work with your ambitions and overall vision to help you close the current deal and fill in that ‘missing’ piece – whatever you need – to keep adding more syndications to your portfolio. We keep syndicators syndicating (TM).

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