Limited Liability Limited Partnerships - What Are They?

Auguest 5, 2004
By Richard Smith, LLB

A limited liability limited partnership (or LLLP, as they're also known) is a partnership arrangement in much the same form as a limited partnership but which registers with the secretary of state , in the applicable state, as an LLLP.

Essentially the benefit of registering limited liability limited partnerships is that it allows the partnership to limited the liability of the general partner of the partnership in addition to the limited partners of the partnership, who would otherwise be protected from liability under a simple limited partnership (LLP) structure.

Although the LLLP provides a greater degree of protection to the partners of the partnership; and, in particular, the general partner(s), partners considering establishing a partnership relationship in this way do need to keep-in-mind how such a structure will have on the partnership.

In particular, with the limited liability protection afforded to both the general (managing) partner(s) and the limited partners, who traditionally have a silent role in a limited liability partnership, the partnership needs to consider carefully what the roles of all partners in the LLP are going to be - and to clearly set these out in the partnership agreement.

Limited Liability Limited Partnership - Registration Process
Basically the registration process of establishing a LLLP is the same as that in the case of a LLP; namely the LLLP needs to file a certificate of registration with the secretary of state, with the additional supporting documentation required, e.g. submitting the name of the partnership and filing fees. Aside from this, there are no greater onerous requirements than is the case with registering an LLP.

Having said that there are no greater onerous filing requirements with forming an LLLP than is the case with an LLP, as has been eluded to, on area where the partnership will have to take a great degree of care is with the partnership agreement.

In particular, as well as looking at the interrelationship between the partners as a whole, the partnership agreement will need to address the matter of a general partners willingness and ability to contribute additional capital to the partnership in order for the partnership to be in a better to advance itself in the future.