A limited liability partnership (LLP) is a business structure that consists of two or more general partners, who are owners of the company. The general partners run the company together, and can act as its representative. While the partners can operate the LLP however they want, they are not personally liable for the LLP. Rather, their liability is limited to only the amount they have chosen to invest in the company. To create an LLP, you need to register it as an LLP with the Kansas Secretary of State.
What Are the Requirements for an LLP?
Every LLP in Kansas must meet certain requirements. First, the company seeking to become an LLP must have a vote in favor of changing from a general partnership to an LLP. Once you have held the vote, you must come up with a name for the company that ends with “L.L.P.”, ”LLP”, “Limited Liability Partnership,” “R.L.L.P.,” “RLLP”, “Registered Limited Liability Partnership.” The LLP must also have a resident agent who is either a person or a business entity that is approved by the Kansas Secretary of State to conduct business in Kansas. The resident agent must be willing to accept official documents and service of process on behalf of the LLP. A domestic LLP, which is an LLP that is created in Kansas, may serve as its own registered agent. However, a foreign LLP, which is an LLP created elsewhere, is prohibited from serving as its own agent. In addition to having the vote, coming up with the new name, and settling on a resident agent, you will also need to file paperwork with the Kansas Secretary of State.
What Paperwork Do I Need to Form an LLP?
The paperwork that you will need to file can be filed either online or via the mail. Domestic LLPs must file a Limited Liability Partnership Statement of Qualification. In order to complete the form, you will need to include the LLP’s name and mailing address, the resident agent’s name and address, and the LLP’s tax closing month, which is the last month of a company’s financial calendar year. You can also include a delayed effective date for the Statement of Qualification if you do not want it to be effective upon filing. Two of the LLP’s partners must sign the form.
A foreign LLP must file both a Certificate of Good Standing or Existence and a Foreign Limited Liability Partnership Statement of Qualification. The form requires you to provide the LLP’s name, the tax closing month of the LLP, the LLP’s maling address, and the country or state where the LLP was first created. You will also need to indicate whether the LLP intends to do business in Kansas upon qualification or on a different date and when you wish the Statement of Qualification to become effective. You will also need to get two of the LLP’s partners to sign it.
What Benefits Does Kansas Give to an LLP?
The profits for an LLP are usually taxed through each partner’s personal income tax. Kansas has chosen to not tax any income that a partner receives in the form of their share of an LLP’s net profits, meaning that a partner will only have to pay a federal income tax on this money. However, a partner will still be taxed for any salary or wage that they receive as an employee of the LLP.
What Disadvantages Does Kansas Give to an LLP?
Kansas requires every LLP to file an annual report on the 15th day of the fourth month following the closing of the LLP’s tax period. In the event that an LLP fails to file the report, it will forfeit its Statement of Qualification and cease to exist.
Should I Hire a Business Lawyer?
Creating an LLP has a lot of requirements and can be a confusing experience. Speaking with a Kansas business lawyer will be extremely helpful during this process.