Limited Liability Partnership - How To Register One Auguest 4, 2004 By Richard Smith, LLB Very simply, a limited liability partnership is formed by a group of people, called the "general partnership." They file a registration statement (which may also be known as an application for registration or certificate of limited partnership liability) in the manner prescribed under state general partnership laws. Once limited liability partnerships (LLP) have submitted their registration statement, they are then required to comply with another couple of procedures.

These procedures are dependent upon the state in which they're registering. Normally these will include paying filing fees - which are usually an annual fee, but may be based on the number of partners in the LLP - and informing the relevant state authorities of the name of the partnership - which generally needs to include LLP, or other similar words.

In addition, depending on where the LLP is being registered, you may also be required to evidence that you have professional insurance to cover any scenario where the partnership may have no liability.

Limited Liability Partnership - What About An Agreement?
Many who are considering setting up an LLP believe it is a requirement that the general partners of the LLP have a partnership agreement. In fact, aside from filing the registration statement, there is no requirement that there be a general agreement between the partners.

However, as the LLP status of the relationship is very likely to have an affect on what each partners liability is, it is generally considered as prudent practice for the general partners to set out the risks and rights that exist between each of them in a partnership agreement - at the time they submit the registration statement, if not beforehand.

One issue of importance that you need to consider when drafting your partnership agreement is what happens to the partners' rights and obligations in circumstances where the partnership does business in a state other than the one in which it is registered. Here, unless there is an intention to the contrary, you may find that the laws of the state where the debts are incurred will govern the obligations of the partners - so make sure you know the extent of each partners' liability if you think this circumstance may apply to you!

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