Limited Liability Partnership (LLP) is a type of business structure that provides the benefits of a partnership. That’s not all. It also limits the personal liability of the partners. Here are some things you need to know about forming an Alabama LLP.
Requirements for an Alabama LLP
One of the first things you must do is to file a registration with the Alabama Secretary of State if you wish to form an LLP in Alabama. You should also appoint a registered agent. This agent is authorized to accept legal documents on behalf of the partnership. The partnership must have at least two partners, and at least one partner must be licensed or authorized to practice the profession with which the LLP is engaged. For instance, if you are forming a law firm, one partner must be a licensed attorney.
What are the Benefits of this Kind of Business?
There are various reasons individuals want to start an LLP in Alabama. For one, this form of partnership limits the personal liability of the partners. In a traditional partnership, each partner is liable for the debts and obligations of the partnership. But in an LLP, you are only liable for your own actions and the actions of those you supervise. It means that if you or your partner makes a mistake, the other partner’s personal assets will not be at risk.
Share Profits and Losses
Another benefit of this form of partnership is that it lets partners share profits and losses without being subject to double taxation. Traditionally, profits are taxed at both the corporate level and the individual level. But in an LLP, profits and losses are passed through to the partners’ individual tax returns. They are only taxed once.
Is It a Perfect Partnership?
One of the drawbacks of this form of partnership is that it may be more expensive to form and maintain compared to other types of business structures. Partners in an LLP are still personally liable for their own actions. It means that if you make a mistake, you are still liable for any resulting damages. Nevertheless, it can be a great option if you want the benefits of a partnership without personal liability.
Easy Way to Form an LLP
Once you have all the requirements required to form an LLP, you can submit them online with the use of our service. The Corporation Center can take care of your company’s formation. We provide online forms to let you launch your LLP quickly. Simply click the Alabama option on the left. Then, provide three names for your partnership. Then, enter your name and address.
How Much Does It Cost to Use this Service?
The application can be standard, or if you want it to be processed quickly, you may choose the rush processing service. Once you agree with the terms and conditions, click the submit button and we will start reviewing the requirements for Alabama LLP. If you have further inquiries, make sure to consult with our experts.