§1.4 - Entity Summaries

• Jurisdiction: Washington

§1.4 ENTITY SUMMARIES

This section summarizes the advantages and disadvantages of each type of entity in real estate transactions.

(1) General partnerships and LLPs

General partnerships enjoy the advantages of comparative ease of formation and maintenance, substantial flexibility in allocation of management, economic benefits and tax attributes, and generally favorable tax treatment. However, there typically are substantial restrictions on transferability of general partnership interests. The most significant factor militating against the use of general partnerships (other than LLPs) in real estate transactions is the unlimited liability of the general partners. However, this disadvantage can be eliminated by registering as an LLP.

(2) Limited partnerships

Although the formation, documentation, and maintenance requirements for limited partnerships are more substantial than for general partnerships, they are not overly burdensome. Limited partnerships have substantial flexibility in allocating management and control, subject to the important...