When it comes to launching a new company, a wide variety of choices are available to consider, such as how to form an LLLP. The Limited Liability Company is one of the most common organizational structures for smaller organizations (LLC). What should you do, though, if you desire the security that an LLC provides but don’t want to be responsible for the business? If this describes you, you might consider forming a limited liability limited partnership (LLLP). In this piece, we will take you step-by-step through forming a limited liability limited partnership (LLP) and highlight some of the advantages that this structure affords company owners. Here are some measures to take if you consider learning to form an LLLP.
Check Your State’s Regulations Regarding LLLPs
Corporations and limited liability companies are not required to get a limited partnership license in all jurisdictions. If your state requires one, the procedure resembles registering for a business license in terms of paperwork. Your state’s rules and the nature of the limited partnership you want to create will have a significant impact. Make sure that an LLP is legal in your state by contacting your Secretary of State.
If you currently have an LLC, it may not be required to convert it into an LLP. Fill out the documents requested by your state’s Secretary of State. The filing of articles of organization in certain states necessitates this, while in others, you may apply for a certificate of limited partnership after filing articles. Assuming you’ve completed the necessary paperwork on how to form an LLLP with your state, you’ll need to choose a name for your LLP at this point.
Choose A Name for Your Company That Satisfies State Registration Requirements.
Pick a name for your business that complies with the rules set out by the state where it will be registered. This is an important first step because, in most cases, state law requires you to use a unique name to avoid any name conflicts with other businesses registered in your state. This will allow you to avoid potential legal issues that may arise from such name conflicts. It is highly recommended that you choose a name for your firm that contains the words “limited partnership,” “limited,” “partnership,” or “company.” Be sure to check with the Secretary of State’s office for more information before deciding on a name, as some states have very specific requirements regarding what you can and cannot include in your name.
Draft And File Partnership Articles of Organization with Your State Secretary of State Office.
Before you can register your new limited partnership with the state, it requires a name, preferably one that is unique and does not already belong to another organization or business. Suppose you already have someone in mind to work with. In that case, this should be simple: First, you should check to see whether anybody else in your state has already registered that name as a trading name or a registered business name, and then you should submit an application to the office of the secretary of state for a trade name certificate or a business registration certificate. If you don’t have anyone in mind just yet, try contacting a lawyer or an accountant who can help you come up with names; if they aren’t available (or too expensive), try searching the internet for “limited partnership” along with the abbreviations for your state (NY LLC, FL LP), and see what results in you get.
Create An Operating Agreement That Lays Out the Terms and Conditions of Your Partnership.
You will need to draft an operating agreement outlining your partnership’s terms and conditions before you can officially start doing business together. In addition, you will need to ensure that your partnership is correctly registered with the office of the Secretary of State in your state, as well as any other appropriate authorities, depending on the kind of company you are doing. You will also want to pay special attention to how profits and losses are distributed in your partnership agreement. It is often more legally sound if just one member is accountable for debts that are incurred by the partnership, so this is something you will want to pay close attention to. Before you officially register your new company, it is a good idea to have your limited liability partnership (LLP) and operating agreement reviewed by a legal professional according to score.org. You do not want the new company’s legal basis to have any holes.
How To Form An LLLP: Obtain Licenses or Permits Required to Operate Your Business in Your Jurisdiction
Alaska, Delaware, Nevada, and Wyoming are the only states that do not need a limited liability limited partnership (LLLP) to have any licenses or permits to do business there. In these states, membership for non-residents is not prohibited. If, on the other hand, the location of the entity is in one of the other 46 states, it will be required to get a license or register as a foreign entity with the appropriate state agency responsible for examining entities of this kind, depending on the kind of company (for example, corporations require licensing through the Secretary of State). Keep in mind that even if your limited liability limited partnership (LLLP) is registered or licensed in all appropriate jurisdictions, the state in which you reside may still require that each member be individually registered.
It’s not uncommon for a relationship to go apart. After juggling competing demands, you may conclude that working together isn’t for you anymore, in which case it’s time to break your relationship. Contact the Corporate Center immediately at (800) 580-4870 for more information on how to form an LLLP.