When creating a business, owners have several options for structuring their company, such as forming a limited liability company (LLC), a corporation, or a limited liability partnership (LLP). What makes an LLP unique is that it offers protection to all of the owners, or general partners, by limiting their liability, while still giving them the ability to equally share control of the company. A partner in an LLP is only liable up to the amount of money they put into the business. Even though they are not liable for the LLP, a partner still has the opportunity to substantially engage in the management of the company. In Kentucky, you will have go through the Kentucky Secretary of State to set up your LLP.
Kentucky’s laws have set forth a number of requirements for an LLP. One such requirement is that you will need to obtain a registered agent who either lives in Kentucky or has permission to do business in Kentucky. They also have to consent to receive official documents and be served on behalf of the company and be located at a registered office associated with the LLP in Kentucky. Another requirement is that the LLP’s name end with one of the following: “Registered Limited Liability Partnership,” “Limited Liability Partnership,” “R.L.L.P.”, “L.L.P”, “RLLP”, or “LLP”. Like all partnerships, an LLP must have at least two partners. If you are looking to form a domestic LLP, you will also need to file a Statement of Authority for your partnership before forming an LLP. A domestic LLP is one that has been created in Kentucky, while a foreign LLP is an LLP that has been created elsewhere. Lastly, an LLP cannot become an LLP in Kentucky unless it files paperwork with the Kentucky Secretary of State.
The paperwork that you need to file differs whether you are trying to register a domestic LLP or a foreign LLP. The paperwork for both types of LLPs can be filed online through the Kentucky One Stop Business Portal website or by mailing in a printed out form that can be found on the Kentucky Secretary of State’s website.
Domestic LLPs have to fill out a Statement of Qualification, and foreign LLPs need to complete a Statement of Foreign Qualification. The forms require a lot of the same information, including:
- The name of the original partnership seeking to be registered as an LLP
- The name that the LLP is planning to use in Kentucky as an LLP if it varies from the original name
- The mailing address of the LLP, which may be either a street address or a post office box
- The name of the registered agent
- The street address of the LLP’s registered office where the agent can be found
If you are forming a domestic LLP, you will need to also list on the Statement of Qualification the date when the partnership filed its Statement of Authority. A foreign LLP filling out a Statement of Foreign Qualification will need to put down the state or country where it was originally set up. Both forms require the signature of the registered agent and two of the LLP’s partners.
Kentucky makes itself business-friendly by providing a number of programs and tax incentives designed to help companies grow in the state. For example, there is the Kentucky Enterprise Initiative Act, which offers a refund of sales and use taxes for items such as construction materials and research and development equipment to companies that are not involved in retail. Another program designed to help Kentucky businesses flourish is the Kentucky Economic Development Finance Authority Direct Loan Program, which provides loans at below-market rates to non-retail companies to help cover the cost of new fixed assets.
Every LLP that is registered in Kentucky will need to file an annual report by June 30. If the report is not filed by the deadline, the LLP can be administratively dissolved if it is domestic or have its authority to conduct business in Kentucky revoked if it is foreign.
Creating an LLP in Kentucky is not an easy task. Thus, you should consult with a Kentucky business lawyer before setting up an LLP.