Partnerships are associations with two or more persons who behave as co-owners of a business for profits. Florida law can create a partnership even if the people involved did not intend to create a partnership. A limited liability partnership (LLP) is a type of business form in which the partners in the business receive personal protection from the LLP obligation and legal faults. All partners are limited partners who can manage the business without having personal responsibility for any misconduct of the LLP.
Florida law outlines the requirements the form a LLP in the state:
- You must name your business based on the state law for naming an LLP;
- You must file a Statement of Qualification with the Florida Department of State Division of Corporations;
- You must choose a Florida resident as the agent to receive your legal notices from the Florida Secretary of State;
- You must have an Employment Identification Number (EIN);
- You must have at least two partners; and
- You must file an annual report maintain your status as a LLP.
The name of the LLP must follow Florida law. The name must end with one of the following names or abbreviations:
- Registered Limited Liability Partnership;
- Limited Liability Partnership;
- RLLP; or
You can download the Statement of Qualification (SOQ) form from the Florida Division Corporations Forms and Fees webpage. After you complete the form, you file it with the Florida Division of Corporations. The SOQ must contain:
- Name of LLP;
- Street address of LLP business office;
- If it is different for the business office, give the street address of principal office in Florida (if there is one);
- Name and street address of agent for service of process (The agent must have a physical address in Florida);
- A statement that the partnership chooses to be a LLP; and
- The date the business becomes a LLP if it is a date later than the filing date.
Limited liability partnerships enjoy several benefits under Florida law, such as:
- LLPs pass their profit and loss tax obligations to the partners;
- Partners pay LLP tax obligations based on their share in the LLP;
- Partners are not personally responsible for another partner’s misconduct;
- The personal assets of each partner receive protection for the misconduct and legal faults of the LLP;
- A partner is personally responsible for any liability or debt he causes on the LLP; and
- You are not personally responsible for the faults of the LLP just because you are a partner.
A Limited liability partnership (LLP) must file its annual report by May 1. The information on the annual report updates the current data on file about the LLP. The report must list:
- The name of the LLP;
- The current address of the LLP; and
- The Employment Identification Number (EIN) of the LLP.
When you form your LLP, your first annual report is due the May of the next year after your business becomes a LLP. For example, if you form your LLP in April 2016, your first annual report is due by May 2017.
You can submit your annual report by mail or on the website to the Florida Department of State, Division of Corporations. The consequences for not filing your annual report are:
- Florida cancels your Statement of Qualification; and
- Your business loses its status as a LLP.
Other disadvantages of a LLP include:
- A partner can bind the LLP to business agreement without the permission of the other partners; and
- When a partner contributes money or property a partner to the LLP, the ownership of the money property transfers to the LLP.;
If you are trying to form a LLP and think you need help, then contact an experienced Florida corporate lawyer today to find your rights and obligations in a limited liability partnership.