Why are limited liability companies and limited liability partnerships considered favorable forms of business?

Limited liability companies (LLCs) and limited liability partnerships (LLPs) are favored forms of business primarily because they do not require a general partner. This characteristic allows for more flexibility in the management structure of the business. In an LLC, members can choose to manage the company themselves or appoint managers, while in an LLP, partners generally have limited responsibilities for the liabilities of the partnership. This structure enables individuals to participate in management without being personally liable for the company's debts and obligations, which is an appealing option for many entrepreneurs and professionals.

While the indefinite lifespan and the absence of state regulations are noteworthy considerations, they do not apply uniformly across all jurisdictions or business structures. The requirement of a general partner would mean accepting a level of personal liability that is typically avoided through these types of business arrangements, making the option of not requiring a general partner particularly advantageous.