Question

Form 1065 Schedule B - Type of Entity

Forum|Forum|1 year ago
May 12, 2024
1 reply
0 views

Hi folks, there are two partners operating a business and it is organized in the state of Tennessee as a "Multiple Member-Managed Limited Liability Company".

I am not sure whether to select "Domestic limited liability company" or "Domestic limited liability partnership" on Schedule B of Form 1065. For sure, they are a partnership but as an LLC.

I don't know the implications of choosing the wrong one. Thanks up front for any guidance on this matter.

M

Mike9241

select "Domestic limited liability company (LLC)"

There is one significant difference between LLP and LLC. An LLP must have a managing partner that is liable for the actions of the partnership. As long as silent partners and investors don’t assume a managerial role, they receive liability protection.

as the terms are used an LLC has members but an LLP has partners - one or more general partners and one or more limited partners.