I agree with your summary of understanding.
The only thing I want to clarify is that when preparing the K-1's, if you do in fact take out $$, then those $$ must be reflected as distributions to each partner on the K-1.
The other item I want to make sure you do, is each partner needs to maintain a basis schedule of their investment in the LLP. This is critical as eventually you will close the LLP and in order to determine your overall gain or loss in the investment you will need your basis.
Attached is a copy of the K-1 instructions and a discussion of basis is on page 3:
<a rel="nofollow" target="_blank" href="
https://www.irs.gov/pub/irs-prior/i1065sk1--2018.pdf#page=3">https://www.irs.gov/pub/irs-prior/i1065...>
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
