The limited liability partnership definition is a business that is similar to a limited liability company (LLC) in that all partners have limited liability for business debts, but in many states this liability protection is less than what LLCs receive. Further, some states limit the use of LLPs to professional occupations that require a license to do business.

A limited liability partnership agreement is especially appealing to businesses that were prohibited in the past from forming a limited liability company (LLC) or corporation, such as accountants and attorneys.

LLPs allow for pass-through taxation as its income is not taxed at the business level, but an informational tax return for the partnership must still be completed. Any income or loss of the LLP as shown on the return is passed-through to the partners’ individual tax returns. The partners must then report the income or loss on their individual tax returns and pay any necessary tax.

You must have two or more partners (owners) to form a limited liability partnership agreement.

LLP requirements vary by state. California and New York limit the use of limited liability partnership agreements to professionals. In California, the term professionals is defined narrowly to include only lawyers, accountants or architects. Delaware, Georgia, Pennsylvania, Texas, and Virginia require an LLP to carry insurance or an escrow account to cover liabilities.

Several states have a reduced form of liability protection referred to as limited shield. These include Alaska, Arkansas, District of Columbia, Hawaii, Illinois, Kansas, Kentucky, Louisiana, Maine, Michigan, Nevada, New Hampshire, New Jersey, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Utah and West Virginia.

No, you can prepare and file limited liability partnership forms yourself or through an online provider like BizFilings, but it’s good to understand the requirements of your intended state of formation. If you are unsure of what business type would be most beneficial for your specific situation or would like to learn more about limited liability partnership advantages, consult an attorney or accountant.

Naming your company or firm is an important decision. Often professional businesses have different naming conventions from other types of companies. For example, many law firms use the names of the partners and many medical practices include their specialty in their business names. Legally, you'll need to ensure that the name is not  "deceptively similar" to any existing company in your state and is "distinguishable on the record" of your state. BizFilings' incorporation service packages include a preliminary state name check to help with this process.

Because some states only check proposed LLP names against existing LLPs, reserved and active, you can perform a trademark search to make sure the name you want to use is not already taken by another business type. Also, keep in mind that most states require the name you select to show your business is an LLP by including the words "Limited Liability Partnership" or the abbreviation "LLP."

Limited liability partnership advantages over other forms of business will depend on the state in which they are formed, however they typically include limited liability protection, pass through taxation and fewer formal requirements. However, depending on the state, these limited liability partnerships advantages are only available to a few forms of business, and may offer less liability protection than an LLC. 

Yes, a registered agent is required when you form your limited liability partnership agreement. The registered agent is responsible for receipt of important legal and tax documents, must have a physical address in the state of incorporation and be available during normal business hours. As your registered agent, BizFilings not only satisfies your state's legal requirement to but also provides a number of benefits at no additional charge to you. We include our monthly Registered Agent Watch email with compliance information specific to your company, access to BizComply─our online compliance management tool, electronic Service of Process (notice of litigation) delivery, online access to your account and more.

Having BizFilings as your registered agent is important if you:

• Want to avoid the risk of non-compliance. You're busy running your firm or practice. Don't get bogged down with business compliance matters. As your compliance partner, BizFilings will help you stay in compliance with state requirements for LLPs, avoid unnecessary state penalty fees and maintain your company's good standing in your state of incorporation.
• Value privacy. When a company is served with a Service of Process, it is often delivered by local law enforcement. Most business owners do not want police officers showing up in front of clients or patients to serve them notice that their company is being sued. Having BizFilings as your registered agent service provider ensures you receive any Service of Process promptly and privately.
• Want compliance professionals to handle this important requirement. Just as you underwent specialized training for your profession, BizFilings specializes in providing registered agent service. We have company-owned offices in each state and a dedicated team of registered agent service professionals to provide superior Registered Agent Service to our customers.

BizFilings helps you fulfill this requirement by providing 6 months of Registered Agent Service free with all three of our LLP incorporation service packages. You also avoid interruption of this valuable service with our convenient auto-renewal program. At the time of renewal, you can choose to renew your LLP’s Registered Agent Service yearly for $167, two years for $249 (save $129) or three years for $348 (save $219). With BizFilings as your registered agent, we're here to help ensure your company remains in good standing with the state.

After you decide to set up an LLP, limited liability partnership forms must be registered and filed with that state and initial fees must be paid. After your registration of limited liability partnership is filed, it is recommended that you hold an organizational meeting of the partners where you adopt an operating/partnership agreement, distribute partnership certificates, and complete other preliminary matters, such as authorizing the opening of a bank account for the LLP. BizFilings' Compliance Kit & Seal includes all the information and paperwork to make this process easier.