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E-Quick Package |
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 £ 25.00 | No Renewal Fees | | |
 This package includes:
 Registration as a self-employed in 2-3 weeks
Practical advice and guidance to help you get your business off the ground
Initial consultation free-of-charge
Preparation and submission of the appropriate forms to Inland Revenue to obtain National Insurance Number and PAYE
Provision of specialised account books, seals and other stationeries (additional fee)
Payment of legal and initiation fees
The following documents will be posted to you (these documents will be sent via Royal Mail):
Written confirmation letter from the Inland Revenue
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| Business Start-Up: Legal Requirements | | |
When you start working for yourself, you will need to register as self-employed with the Inland Revenue.
Once you are registered as self-employed, you will be a Self Assessment taxpayer.
You can trade under your own name, eg John Doe, or use another business name, eg AAA Business Marketing.
If you are self-employed, you are responsible for paying your own tax and National Insurance contributions.
You will need to keep business records and details of your income so you can fill in an annual tax return.
If your business turnover is more than the VAT threshold (£61,000 from 1 April 2006) you will normally have to register for VAT.
You pay Class 2 NICs at a flat rate of £2.10 a week (2006-2007) if your earnings are above £4,465 per year.
Bear in mind that Class 2 NICs do not count towards the additional State Pension, Statutory Sick Pay or Jobseeker's Allowance.
Key dates for self-employed tax:
30 September: sending in your paper tax return if you want HMRC to work out how much tax you owe.
31 January: sending in your tax return to avoid a penalty.
31 January and the following 31 July: tax payments.
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Company Formation Home Page >> Incorporating in Delaware and Forming Delaware LLCs >> American LLP FormationsADVICE, INFORMATION & REGISTRATION SERVICES FOR STARTING YOUR BUSINESS: DELAWARE LLP FORMATION. ADVANTAGES OF FORMING AN LLP IN DELAWARE Delaware's strong history of preserving the freedom of contract is maintained in the Act. Section 15-1201 of the Act specifically provides "the rule that statutes in derogation of the common law are to be strictly construed shall have no application to this chapter." In addition, Section 15-103(d) of the Act states that "it is the policy of this chapter to give maximum effect to the principle of freedom of contract and to the enforceability of partnership agreements." In addition to the forgoing rules of statutory construction, the Act itself allows for a great amount of flexibility to modify the default provisions of the Act in a partnership agreement. In fact, other than the relatively limited number of provisions of the Act that Section 15-103(b) of the Act provides restrictions on modifying, nearly all other provisions of the Act may be modified in the partnership agreement. Such flexibility allows for partners in the partnership agreement to, among other things, specifically address management of the partnership, distributions, voting rights and indemnification, in order to appropriately reflect the intentions of the partners. The partners, in the partnership agreement, may also modify certain duties of partners to the partnership and other partners. Similarly, Section 15-103(e) of the Act offers additional protection to partners in stating that "a partner or another person shall not be liable to the partnership or the other partners or another person that is a party to or is otherwise bound by a partnership agreement for the partner's or other person's good faith reliance on the provisions of the partnership agreement." Other advantages of Delaware general partnerships include the ability of, and relative ease with which, a partnership can merge and convert, as well as the ability of a partnership to maintain continuity notwithstanding changes in its partners.
Under the Act, an LLP is for all purposes a general partnership. However, as discussed below, by becoming an LLP, the partners of a Delaware general partnership are able to limit their liability. It is fairly simple to become an LLP. Under the Act, unless otherwise provided in the partnership agreement, the necessary approval to become an LLP is the same vote that is otherwise necessary to amend the partnership agreement or, in the case of a partnership agreement that expressly considers obligations to contribute to the partnership, the vote necessary to amend those provisions. For this reason, if a partnership is contemplating becoming an LLP it may be advisable expressly to approve such qualification, as well as to authorize one or more partners or other authorized persons to execute and make the filings necessary for the partnership to qualify and continue as an LLP (which are executed in the same manner as a Statement of Partnership Existence), in its partnership agreement.
In addition, to maintain its status as such, the LLP is also required to file an annual report with the Secretary of State of the State of Delaware by June 1 of each year following the calendar year in which the partnership initially files the Statement of Qualification. The annual report must state the name of the LLP, the number of partners of the partnership (the specific names of such partners do not need to be listed) and the address of the registered office and the name and address of the registered agent of the partnership in Delaware for service of process. An LLP is not required to make any filing, or amend a previous filing, due solely to changes in the number of partners of the partnership, as the annual reports are the only necessary filings to reflect such changes.
 We Have Available Delaware LLPs and Limited Liability Companies» List of Delaware Ready-Made LLPs & LLC for Sale |
The Delaware principles, and Act provisions, relating to statutory construction, combined with the many flexible and beneficial provisions of the Act, enable a Delaware general partnership to adapt to the ever-changing needs of a business entity. And to the extent that advances in the law of general partnerships allow for more flexibility, Delaware general partnerships will be able to take full advantage with confidence that the Delaware courts will respect the provisions of partnership agreements. All limited liability partnership ("LLP") statutes provide that LLP partners will be personally liable for their own negligence or malfeasance. In addition, most LLP statutes provide that LLP partners are liable for the negligence, wrongful acts and misconduct of any person under the LLP partner's "direct supervision and control," although the statutory terminology differs in this regard.
In Order to Form an LLP You May Use Our Online Application Forms » Delaware LLP Registration Package - £289.00 | Arkansas LLP Creation Package - £122.00 |
 Chapter 15. Delaware Revised Uniform Partnership Act. Subchapter X. Limited Liability Partnership.
(a) A domestic partnership may be formed as, or may become, a limited liability partnership pursuant to this section.
(b) In order to form a limited liability partnership, the original partnership agreement of the partnership shall state that the partnership is formed as a limited liability partnership, and the partnership shall file a statement of qualification in accordance with subsection (c) of this section. In order for an existing partnership to become a limited liability partnership, the terms and conditions on which the partnership becomes a limited liability partnership must be approved by the vote necessary to amend the partnership agreement and, in the case of a partnership agreement that expressly considers obligations to contribute to the partnership, also the vote necessary to amend those provisions, and after such approval, the partnership shall file a statement of qualification in accordance with subsection (c) of this section.
(c) The statement of qualification must contain: (1) The name of the partnership; (2) The address of the registered office and the name and address of the registered agent for service of process required to be maintained by Section 15-111 of this chapter; (3) The number of partners of the partnership;
(4) A statement that the partnership elects to be a limited liability partnership; and
(5) The future effective date or time (which shall be a date or time certain) of the statement of qualification if it is not to be effective upon the filing of the statement of qualification.
(d) The status of a partnership as a limited liability partnership is effective on the later of the filing of the statement of qualification or a future effective date or time specified in the statement of qualification. The status as a limited liability partnership remains effective, regardless of changes in the partnership, until it is canceled pursuant to Section 15-105(d) of this chapter or revoked pursuant to Section 15-1003 of this chapter.
(e) A partnership is a limited liability partnership if there has been substantial compliance with the requirements of this subchapter. The status of a partnership as a limited liability partnership and the liability of its partners is not affected by errors or later changes in the information required to be contained in the statement of qualification under subsection (c).
(f) The filing of a statement of qualification establishes that a partnership has satisfied all conditions precedent to the qualification of the partnership as a limited liability partnership.
(g) An amendment or cancellation of a statement of qualification is effective when it is filed or on a future effective date or time specified in the amendment or cancellation.
(h) If a person is included in the number of partners of a limited liability partnership set forth in a statement of qualification, a statement of foreign qualification or an annual report, the inclusion of such person shall not be admissible as evidence in any action, suit or proceeding, whether civil, criminal, administrative or investigative, for the purpose of determining whether such person is liable as a partner of such limited liability partnership. The status of a partnership as a limited liability partnership and the liability of a partner of such limited liability partnership shall not be adversely affected if the number of partners stated in a statement of qualification, a statement of foreign qualification or an annual report is erroneously stated provided that the statement of qualification, the statement of foreign qualification or the annual report was filed in good faith.
(i) Notwithstanding anything in this chapter to the contrary, a domestic partnership having, or that but for its election in accordance with § 15-1206(c) of this chapter, would have had, on December 31, 2001, the status of a registered limited liability partnership under predecessor law, shall have the status of a limited liability partnership under this chapter as of January 1, 2002, and to the extent such partnership has not filed a statement of qualification pursuant to this section, the latest application or renewal application filed by such partnership under such predecessor law shall constitute a statement of qualification filed under this section. (72 Del. Laws, c. 151, § 1; 73 Del. Laws, c. 223, § 2; 75 Del. Laws, c. 50, §§ 26-29.)
The major advantage of a Delaware general partnership's becoming an LLP is that the partners are protected from the general rule of partner liability as stated above, and in this way are able to limit their liability. Under the Act, the obligations of the partnership incurred while an LLP, whether arising in contract, tort or otherwise, are solely the obligations of the partnership. Under the Act, a partner of an LLP is not personally liable, directly or indirectly, by way of indemnification, contribution, assessment or otherwise, for such an obligation of the LLP, solely by reason of being or so acting as a partner. In addition to relying on the Act for this limitation of liability, a statement to this effect should also be contained in the partnership agreement. Of course, a partner may still have liability for its own actions or in accordance with the partnership agreement.
The intent of the Act is to offer similar limitations against personal liability to partners of an LLP that are afforded to managers and members of a limited liability company, limited partners of a limited partnership (and general partners of a limited liability limited partnership) and shareholders of a corporation, each as organized under the applicable Delaware statute. It is important to note that there is a concern that the limitation of liability of partners of an LLP may not be respected in certain jurisdictions (particularly those that have not enacted a limited liability partnership statute), and such jurisdictions may instead apply the general rules of liability to the partners of a general partnership. While the concern over the limitation of liability being respected continues to lessen, as a result and based on certain other factors, the number of LLPs is relatively few, with many entities instead opting for another form unless there is a special reason to utilize a general partnership.
If you want to become familiar with the description and the contents of Delaware LLP formation packages, offered by Coddan and to find above, what kind of service is included in this or that Delaware LLP incorporation package, to get an idea about the price of annual renewal of the service, and about the general legal requirements to the LLP registration within State of Delaware, please, select the package you need from the list, situated below the banner. The information in the banner will be renewed according to the package you've chosen.
Please note » The prices payable for the items that you order are clearly set out in the web site. There will be no contract of any kind between you and us unless and until we receive payment from you. We are not able to guarantee that any such filing will be acceptable to Secretary of State, nor are there any contractual obligation upon us to do so. If Secretary of State rejects incorporation or other electronic filing, we will credit your account with a full refund and the contract between us will be made void. Secretary of State does not offer a cancellation facility for the incorporation of companies or the electronic filing of documents. We will be unable to cancel any such submission on your behalf and will not refund any payment you have made. All prices shown at Coddan Web Site are in Great British pounds. Credit cards are the preferred method of payment; we accept VISA, MasterCard and Delta. We can accept payment in UK Pounds Sterling, US Dollars, Euros, Australian Dollars and Canadian Dollars.
Live Help » Live Help is a real time "chat" feature which enables you to interact with a customer service representative without a phone call. Get answers to your questions while using our website. Clicking the "Live Help" button will start an on-line session with one of our representatives. Live Help is currently available during normal business hours. Outside of the above opening hours our business center will be closed. When you click on the button you will see an e-mail form that will allow you to send us a mail with your questions. Live Help is absolutely free! There are no hidden fees. We offer the service as a courtesy to our website visitors. Dear visitors, while having a chat session with a customer, we are frequently requested to give a piece of advice on tax planning or business structuring. We would like to inform you that it is against our principles to provide online advice pertaining to these issues. The points that may be covered during a session include service description, package or service price, navigation at our website, ways of making an order, methods of payment etc. Yet, if you wish us to provide you with advice on tax or business structuring, you should be aware that this service is chargeable. If you have questions please E-Mail or call us: Call FREE 0800 081 1510, Overseas Residents: +44 845 020 4269 or +44 20 7060 0382, Fax: +44 20 7681 3318 or USA Toll Free: 1 877 557 5939.
 DELAWARE LLP ANNUAL REPORT | 
| Limited Liability Partnerships (LLPs) have become a hot topic among executives looking to maximize their after-tax income and minimize their liability exposure.
Some communications firms, particularly partnerships, may realize significant benefits by converting to an LLP.
However, if you currently do business as a corporation, the tax costs of converting may outweigh the advantages.
LLPs are similar to LLCs in terms of tax treatment.
Significantly, the liability protection is frequently limited only to liabilities arising out of malpractice committed by other partners.
A partner will not be shielded from liabilities arising from contracts or from malpractice committed by that partner or those he or she supervises.
The LLP form is often chosen by professionals in states with legislation that limits the ability of professionals to operate as LLCs.
Flow-through taxation and limited liability are the two greatest advantages of LLPs.
Partnerships can convert to one of these entities fairly easily. The conversion does not result in taxable gain, at least when the partners' or members' interests in the organization's capital, income, and loss remain the same after conversion.
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(1) the name of the limited liability partnership and the state or other jurisdiction under whose laws the foreign limited liability partnership is formed and the number of partners of the partnership; and
(2) the address of the registered office and the name and address of the registered agent for service of process required to be maintained by Section 15-111 of this chapter.
(b) An annual report must be filed by June 1 of each year following the calendar year in which a statement of qualification filed by a partnership becomes effective or a foreign partnership becomes authorized to transact business in the State of Delaware.
(c) On or before March 31 of each year, the Secretary of State shall mail to each partnership at its registered office set forth in the last filed statement of qualification or statement of foreign qualification or annual report a notice specifying that the annual report together with applicable fees shall be due on June 1 of the current year and stating that the statement of qualification or statement of foreign qualification of the partnership shall be deemed to be revoked unless such report is filed and such filing fee is paid on or before June 1 of the following year. The Secretary of State shall not issue a certificate of good standing with respect to any partnership which has not filed an annual report and paid the required filing fee pursuant to this section. The statement of qualification or statement of foreign qualification of any such partnership that fails to file such annual report or pay such required filing fee on or before June 1 of the following year shall be deemed to be revoked.
(d) A revocation under subsection (c) only affects a partnership's status as a limited liability partnership and is not an event of dissolution of the partnership.
(e) A partnership whose statement of qualification or statement of foreign qualification has been revoked pursuant to subsection (c) may apply to the Secretary of State for reinstatement after the effective date of the revocation. The application must state: (1) the name of the partnership and the effective date of the revocation; and (2) that the ground for revocation either did not exist or has been corrected.
(f) A reinstatement under subsection (e) relates back to and takes effect as of the effective date of the revocation, and the partnership's status as a limited liability partnership continues as if the revocation had never occurred. (72 Del. Laws, c. 151, § 1; 73 Del. Laws, c. 223, § 3; 75 Del. Laws, c. 50, §§ 30, 31.)
CODDAN IS A REGISTERED AGENT FOR DELAWARE CORPORATIONS, LIMITED LIABILITY COMPANIES AND LIMITED LIABILITY PARTNERSHIPS. WHAT IS A LIMITED LIABILITY PARTNERSHIP? A limited liability partnership (often called an "LLP") is a form of business organization that joins the other more traditional forms of business organization including corporations, partnerships, and limited partnerships. Also added recently has been the limited liability company (LLC). Like these other business forms, an LLP is a legally recognized entity, which is organized for the purpose of engaging in business. The LLP form of business organization offers certain unique advantages not available with the other forms of business organization. A form of general partnership that provides an individual partner protection against personal liability for certain partnership obligations.
The limited liability partnership (LLP) is essentially a general partnership in form, with one important difference. Unlike a general partnership, in which individual partners are liable for the partnership's debts and obligations, an LLP provides each of its individual partners protection against personal liability for certain partnership liabilities. Similar to limited liability company (LLC), limited liability partnerships (LLPs) are organized under state law and offer a degree of liability protection for individual partners. For Federal tax purposes, limited liability partnerships follow the same entity classification rules as Limited Liability Company. A limited liability partnership may elect to be treated as a corporation by filing Form 8832. If no election is made, the limited liability partnership is treated as a partnership and files Form 1065.
Limited Liability Partnership is similar to Limited Liability Company: both are granted limited liability status under state statutes. Both are easy to organize in comparison to corporation formation. Both are treated as partnerships for federal tax purposes provided they do not elect to be treated as corporations by filing Form 8832. Both are relatively new forms of business entities compared to general partnerships, limited partnerships, and corporations. In many states, limited liability partnership and limited liability company statutes parallel each other in the way state franchise taxes are imposed.
DELAWARE LLP LIABILITY In certain states, limited liability partnership laws differ from limited liability company laws in the degree of liability protection. In general, limited liability company and corporations limit the liability to an owner's investment in the business; plus the owner's individual negligence or malpractice. Limited liability partnership laws generally provide liability protection against the malpractice of other partners. However, a limited liability partnership partner may still be jointly and severally liable for the contractual debts of the business. Newer state limited liability partnership laws have extended liability protection to the partnership's contractual debts that exceed the value of the owner's investment interest in the limited liability partnership. However, many states require limited liability partnerships (LLPs) to obtain a certain level of liability insurance.
PROFESSIONAL LLP (LIMITED LIABILITY PARTNERSHIP) Many state statutes do not allow professional firms (such as, accounting practices, law firms, medical practices) to form an entity other than a general partnership. Many state accountancy rules mandate a general partnership as the only structure for the practice of accounting, which includes limited liability partnerships and not limited liability company.
STATE TAX Some states tax Limited Liability Partnerships as partnerships, and Limited Liability Company as corporations. State franchise taxes are higher for Limited Liability Company in certain states than for Limited Liability Partnerships.
LIMITED LIABILITY PARTNERSHIP FORMATION Existing partnerships in certain states can be converted to a limited liability partnership simply by amending their partnership agreement and registering as a limited liability partnership with the Secretary of State. Forming a limited liability company requires creating a new entity.
CONVERSION TO LLP STATUS For Federal tax purposes, converting a general partnership into an limited liability partnership will follow the same rules as converting a general partnership into an limited liability company. The partnership does not terminate and the limited liability partnership continues to file Form 1065 as the same partnership. (IRS Letter Ruling 9448026).
WHO CAN USE LIMITED LIABILITY PARTNERSHIP? The states of Texas and Delaware have enacted laws allowing general partnerships to reclassify themselves as registered limited liability partnerships. These statutes protect partners in an RLLP from liability for debts and obligations resulting from errors, omissions, incompetence, negligence or malfeasance committed by other partners or partnership agents who are not under the supervision of the protected partner at the time of the act. The partners are not protected in cases when they have direct participation in the claimed act or when they have knowledge of the act during its occurrence but failed to take appropriate actions.
In 1991 Texas enacted the first LLP statute, largely in response to the liability that had been imposed on partners in partnerships sued by government agencies in relation to massive savings and loan failures in the 1980s. The Texas statute protected partners from personal liability for claims related to a co-partner's negligence, error, omission, incompetence, or malfeasance. It also permanently limited the personal liability of a partner for the errors, omissions, incompetence, or negligence of the partnership's employees or other agents. By the mid-1990s, at least twenty-one states and the District of Columbia had adopted LLP statutes. In August 1991, Texas revised the Texas Uniform Partnership Act ('TUPA') to permit partners of Texas general partnerships to be statutorily protected from the errors, omissions, and negligence of other partners by becoming a registered limited liability partnership ('RLLP'). In May, TUPA was further amended. The May 1993 amendments are effective January 1, 1994. In June 1993, RLLP legislation was passed by the Delaware state legislature, which amends the Delaware Uniform Partnership Act to provide for the formation, registration, and regulation of Delaware LLPs. The Delaware legislation is expected to be sign by the governor and is to be effective as of August 1, 1993. The following discussion of the TUPA and Texas LLP reflects the May 1993 amendments to TUPA and the Delaware RLLP legislation. Louisiana has enacted and other states (including Massachusetts, North Carolina, and the District of Columbia) are considering similar provisions. In addition, Minnesota has passed legislation, which recognizes an RLLP formed in another state. Typically, general partners of partnerships are personally jointly and severally liable for the wrongful acts or omissions of their other partners. In contrast, a professional in a professional service corporation ('PC') usually does not (subject to certain exceptions) have personal liability for any negligence, wrongful act, or misconduct committed by his or her fellow shareholders while rendering professional services on behalf of the corporation.
The Texas and Delaware statutes provide that a general partnership organized under the laws of those respective states-may elect to become a registered limited liability partnership. A partner in a LLP is not individually liable for debts and obligations of the partnership arising from errors, omissions, negligence, incompetence, or malfeasance committed in the course of the partnership business (while the partnership is a LLP) by another partner or a representative of the partnership not working under the protected partner's supervision or direction at the time the claimed act occurred, unless the protected partner 1) was directly involved in the specific activity in which the claimed act was committed or 2) had notice or knowledge of the claimed act at the time of occurrence and then failed to take reasonable steps to prevent or cure the claimed act. The Delaware statute states that a partner in a RLLP is not liable for debts and obligations of the partnership arising from negligence, wrongful acts, or misconduct committed in the course of the partnership business by another partner or an employee, agent, or representative of the partnership. The Delaware statute further provides that a partner in a LLP remains liable for his own negligence, wrongful acts, or misconduct, or that of any person under his direct supervision and control.
Under both statutes, a partnership still remains an entity, which can be sued for the acts or omissions of one of its partners, and the partnership assets would be a source for recovery by the plaintiff. In addition, the Texas LLP law provides that a LLP must carry at least $100,000 of liability insurance of a kind that is designed to cover the kind of act for which liability is limited by the LLP provisions or must segregate cash or cash equivalents in such amount to satisfy any judgment for the kind of act for which liability is limited by the RLLP provisions. The Delaware legislation has a similar provision, except that it requires LLPs to carry at least $1,000,000 of liability insurance or must segregate funds of at least that amount.
Both LLP statutes cover all general partnerships, not just personal service partnerships. The Texas statute was originally introduced as an alternative means for allowing professionals the limitation of liability already available to them under the Texas Professional Corporation Act and the Texas Professional Association Act. Thus, the initial proposed amendment to TUPA applied only to certain kinds of professional partners such as physicians, architects, attorneys, CPAs, and veterinarians. However, the proposed bill was criticized as being discriminatory against non-professional partnerships and led to the broadening of the 1991 revisions to cover all partnerships. It should be noted that the statutory misconduct standard of 'errors, omissions, negligence, incompetence, or malfeasance,' was taken from the Texas Professional Corporation Act and the Texas Professional Association Act.
From the effective date of the law through April 1993, approximately 900 partnerships registered as LLPs in Texas, and it is estimated that approximately 90% of such LLPs were partnerships of professionals. It should be noted that the Delaware statute provides that the ability of an attorney admitted to practice law in Delaware to practice law in a LLP is determined by the Rules of the Supreme Court of Delaware. Filing an application with the Secretary of the State together with a fee of US$200.00 for each partner forms a Texas limited liability partnership. Filing an application with the Secretary of State together with a fee of US$100.00 for each partner forms a Delaware LLP but the fee may not exceed the maximum annual corporation franchise tax. In addition, under the Texas and Delaware statutes, 1) the partners do not have to be listed, 2) the registration is renewed (and the fee is paid) annually, 3) there is no requirement to amend the registration during the year upon the admission or the withdrawal of a general partner. To ensure that third parties are aware of the limitation on liability, both statutes require the partnership name to include the words "registered limited liability partnership" or the abbreviation "L.L.P."
Under the Texas legislation, a partner is not protected if the wrongdoer co-partner or representative was 1) under his or her supervision or direction when the act occurred or if he or she was directly involved in the specific activity in which the alleged act was committed or 2) had notice or knowledge of such act at the time of occurrence. It appears that the Texas legislature intended the partner's direction or supervision of the alleged act to be 'fairly specific' for a non-active partner to lose the protection. For example, a managing partner who exercises only general supervision over all partnership activity should not be found to be involved in the "direction or supervision" of every partnership activity. In addition to Texas and Delaware, Louisiana has adopted LLP legislation. In the last few months, bills authorizing the creation of LLPs were introduced in the District of Columbia, Massachusetts and North Carolina and Minnesota recognizes a LLP formed in Massachusetts.
LIMITED LIABILITY PARTNERSHIP NAMES Two or more individuals, corporations, partnerships, trusts, or other entities can join together to engage in business as an LLP. The owners of an LLP are called "partners". Partners essentially own the LLP much in the same way as partners own a general partnership and shareholders own a corporation. When an LLP engages in business activities, it is the LLP itself, which actually owns and operates the business from a legal sense.
WHAT MAKES AN LLP UNIQUE? The name of every partnership filed with the Corporations Division must end with the words registered limited liability partnership, limited liability partnership or the abbreviation L.L.P. or LLP. Professional limited liability partnerships can also include registered professional limited liability partnership, or professional limited liability partnership. Partnership names cannot include words indicating corporate status, i.e. incorporated, corporation or an abbreviation thereof. Additionally the name cannot include the word limited, apart from the required ending. For example Work Solutions Limited, L.L.P. would not be accepted for filing.
LIMITED LIABILITY - WHAT IS IT? An LLP can be organized to combine several of the best features of the others forms of business organization. An LLC provides its partners with limited personal liability for the obligations of the business. With a few exceptions, unless an LLP elects to be taxed as a corporation, its income is not taxed to the LLP, but is instead "passed-through" to the partners and taxed to them at their individual tax rates in the same manner as the income of a general partnership is taxed. The LLP form also allows great flexibility to its partners - not just in terms of who can be a partner and who can manage, but also in terms of the way the partners are allowed to "share" the profits, income, and equity of the LLP among themselves.
TAX TREATMENT Limited personal liability of the partners of an LLP means that in most situations the debts and obligations of the business engaged in by the LLP are not the personal responsibility of the partners - the debts and obligations of the business can only be paid from the income and assets of the LLP. Of course, if a business operated by an LLP has financial difficulties, each partner of the LLP could lose the amount of his or her investment in the LLP, as well as the equity built up in the business. Beyond this, however, no partner risks the loss of his or her other assets and income. The limitation on the personal liability of an LLP's partner works in the same way as the limitation on the personal liability of the corporation's shareholders and the LLC's members. Limited personal liability is not a characteristic of all forms of business organization, however. In a general partnership, each of the partners is personally liable for all of the debts and obligations of the business of the partnership. A partner risks not only the loss of his or her investment and the equity of the business, but also risks loss of his or her personal assets if the partnership is unable to satisfy its obligations out of partnership assets.
ANNUAL REPORTS LLPs normally will be treated for tax purposes as partnerships. If an LLP wishes to be taxed as a corporation, it must affirmatively elect such treatment. Under IRS Proposed Regulations, LLPs would automatically be taxed as partnerships unless they elect otherwise. In most cases, treatment of an LLP as a partnership for tax purposes will be the desired result. When an LLP is treated for tax purposes as a partnership it is called a "pass-through" entity. This is because the income or loss of the LLP's business is not taxed to the LLP but instead allocated among the partners (either in proportion to their ownership interest in the LLP or in other proportions agreed to by them) and then combined with the respective partners' other income and taxed to them separately on their individual income tax returns. On the other hand, if an LLP elects to be treated as a corporation for tax purposes, and not as an "S" corporation, the income of the LLP is subject to what is sometimes called the corporate "double-tax". The income is taxed once directly to the LLP and then taxed again when the partners receive distributions from the profits of the LLP. All registered limited liability partnerships must file an annual report on or before the last day of February. The report renews the registration and must include all information required or allowed in the original registration.
If the partnership renders professional services the report must identify all partners who render professional services in the Commonwealth and contain a certification that each partner who renders a professional service in the Commonwealth is duly licensed to do so. The annual report does not need to be accompanied by a certificate from the regulatory board. If the partnership fails to file the report when due or to pay the required fee, the Corporations Division may revoke the partnership's registration. Under such circumstances, the Corporations Division will notify the partnership at least sixty (60) days prior to t
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