A LLP and a company have in common that they both have rights and liabilities that are distinct from its partners, respectively, shareholders.
In some countries though an LLP must also have at least one “general partner” with unlimited liability. A LLP is not always considered a corporate body, that is to say, that it has a continuing legal existence independent of its members.
A UK LLP however is considered a corporate body. A LLP is managed by its partners as is the case in a regular partnership, not by a board of directors. It operates under a partnership agreement, which usually doesn’t even need to be written down.
The partnership agreement is normally a private document, ie not on public record, and completely flexible in governing the rights of the partners. This is in contrast to the limited flexibility available in the wording of the memorandum and articles of association of a company limited by shares; a document which is usually on public record.
A company limited by shares on the other hand is normally subject to multilevel taxation: i.e. the company is taxed on its profits and the shareholders are taxed on dividends and capital gains derived from the company. LLP’s on the other hand, like partnerships, are in most jurisdictions treated as transparent for tax purposes.
This means that the income of the partnership will be treated as if it arose directly to the partners. The partners will be taxed in their country of residence. Whether the partnership is taxed in its country of incorporation because it was incorporated there, depends on the country in question.
There are several countries that do not tax partnerships on this basis, for instance the UK doesn’t. The partners might still be taxed because the LLP has a permanent establishment or even a source of income in the country.
A limited liability Company (LLC) is another corporate entity that some jurisdictions offer. LLC’s are almost the same as LLP’s, with two main differences: that they can also have one member only, and that non-member managers can be appointed. LLC’s are offered by the USA and are tax transparent in the USA; although the option is available to have them taxed in their own right.
The use of LLC’s by non- US persons has become less popular in recent years due to the US Foreign Bank Account Reporting (FBAR) rules, which require US persons, including US LLC’s, whether they have non-resident members or not, to annually report any non US bank accounts to the IRS.
Other differences between the LLP and the LLC concern terminology, for instance the partnership agreement is called an operating agreement when a LLC is concerned. Various offshore jurisdictions have benefited from this.
 

One Of Them Is The Belize LLC, Which Is Available Since Last Year

What sets the Belize LLC apart from those offered by other jurisdictions is the very strong asset protection features.
In order to file a claim, a creditor first has to deposit an amount equal to half the amount claimed or US$25.000, whichever is greater, with the Supreme Court Registry.
This is of course an excellent deterrent for frivolous lawsuits. If a creditor wins his case then a charging order is applied against a member’s interest. But the judgment creditor shall only have the rights of an assignee of the member’s interest and shall have no right to partake in the management of the company. So he can receive profit distributions but can never force the management to make them.
In fact the member cannot have any say at all as to how the manager runs the company.
Of course asset protection is only as good as the weakest link. If the assets are located in another jurisdiction then they will be subject to the laws there as well as in Belize.
Belize has strong confidentiality under local law, in fact one of the strongest in the world according to the Financial Secrecy Index, however this confidentiality is not applicable if there is a valid request of a foreign tax authority from one of the countries with which Belize has signed a tax information exchange agreement (TIEA).
The signed TIEA’s however do not have any impact on the asset protection benefits of Belize, because these treaties do not have assistance with collection of taxes clauses, a usual feature of tax treaties.
The Belize LLC only has to keep minimal information on public record, namely the Articles of Organisation. The articles of organisation should state (a) the name of the limited liability company; (b) the name, address and signature of the registered agent; (c) the name and address of the person who signed the articles of organisation.
The Operating Agreement may optionally be registered, there is no requirement to file annual accounts. In EU countries, bank accounts can be frozen easily without having to present any upfront evidence. When the proposed European Account Preservation Order is adopted it will allow a creditor to freeze funds held in any EU bank account held by a debtor.
At present, creditors are reliant on taking steps in the jurisdiction where the accounts are domiciled such as obtaining domestic freezing orders. Belize LLC ‘s are an ideal vehicle for those resident in more litigious societies to protect their assets at a very reasonable expense. Furthermore, since LLC’s are normally tax transparent no tax issues arise; the funds and income of the Belize LLC will remain reportable in the country of residence of the member.
 
Anyone interested in forming a LLC in Belize or redomiciling a LLC from the US can contact us for a free consultation.
 
You also might be interested in this:
 
Do you want to know what political risk you and your business face? Political Risk And Asset Protection.
 
Read this to fully prepared for dealing with an offshore environment: Offshore Finance Regulation.