LP/LLP
Partners required for an LP
At least 2
FLP
Family Limited Partnership. It is the same as a LP, but ALL partners are family members. Typically used as asset management straegy to reduce estate tax on assets and avoid probate.
Limited Partnership Agreement
Internal governance of an LP, similar to an OA for LLC, but not filed with the state. LZ does not provide this.
LLP script
Limited Liability Partnerships is a state specific filing that is comprised of two or more partners that typically provide professional services. It allows you to identify your business as a separate entity, while providing all partners with limited liability protection against any malpractices caused by another partner.
Limited Liability Protection
Limited liability protection means that you will be liable up to the amount of your investment.
LP and General Partnership differences
No, filing an LP creates a separate legal business entity, by filing a Certificate of Limited Partnership in the state where the LP will operate. A General Partnership is usually established with a General Partnership agreement-and this is usually an informal agreement between 2 or more parties to conduct business is some manner. A general partnership agreement is not filed with the state and does not establish a distinct legal, business entity.
Are there general partners in an LLP?
No. All partners are limited partners.
LP is taxed
Pass through taxation, all income of the LP is reported on the partners' individual income tax return.
Do LLPs require an EIN?
Yes.
Is an EIN required for an LP?
Yes.
Are all Partners in an LLP Limited Partners?
Yes. All partners in an LLP are limited partners and have limited liability protection for their investment.
Do LPs & LLPs require name designators?
Yes. LPs require Limited Partnership or abbreviation thereof designator. LLPs require Limited Liability Partnership or abbreviation thereof designator.
Are LPs always required to have both a General & Limited Partner?
Yes. There must be at least 1 general and at least 1 limited partner in an LP.
Types of Partners from LP
1. General Partner 2. Linited Partner
Role of General Partner in an LP
1. In charge of the overall management. 2. Liable in the event of a debt or lawsuit-have no liability protection
What information is required to form an LLP?
1. LLP Name 2. % of ownership 3. Names of Limited Partners
What information is required to form an LP?
1. LP Name 2. Names of General & Limited Partner(s) 3. Percentage of ownership
Why would someone form an LP?
1. Popular for investment groups & real estate. 2. Investors are often limited partners. 3. Investors may be attracted to an LP because limited partners are not responsible for management and have limited liability protection. 4. The general partner could be an existing Corporation or LLC.
Role of Limited Partner in an LP
1. Typically passive investors no day to day responsibilites in managing the business. 2. Limited liability protection in the event of debt or lawsuit.
Why would someone want to form an FLP?
1. Typically used as a wealth transfer strategy or estate planning tool, rather than a business structure. 2. FLPs are designed to reduce the value of your estate (for estate tax purposes) while allowing you to maintain full control of investments and assets within the partnership. 3. FLPs allow you to pass on more than the maximum Estate Tax Credit. Ownership in the FLP has no public market and therefore can be "discounted" within a reasonable degree to a lower amount. 4. Limited partners can be restricted from transferring or selling their ownership interests in the company.
LP script
A Limited Partnership is a state specific filing that is comprised of two or more partners including a General Partner(s) & Limited Partner(s). It allows you to identify your business as a separate entity, while providing limited liability protection for the Limited Partners.
Certificate Limited Partnership
A document filed with the state, along with a fee, to create the Limited Partnership. the birth certificate of the LP.