There are many ways to structure a company, such as a corporation, a limited liability partnership (LLP), or a sole proprietorship. With an LLP, the owners, known as partners, have limited liability and can only be held liable up to the amount they choose to invest in the company. At the same time, all of the partners are allowed to make decisions for the LLP. You must register an LLP with the South Dakota Secretary of State’s office if you want the LLP to be able to transact business as an LLP in South Dakota.
What Are the Requirements for an LLP?
In order to become properly registered as an LLP with the South Dakota Secretary of State, a company must satisfy a number of requirements. One of these requirements is for the LLP’s name to contain “Registered Limited Liability Partnership,” “R.L.L.P.”, ”RLLP”, “L.L.P.”, “Limited Liability Partnership,” or “LLP” at the end. Generally, an LLP will need a registered agent that is willing to receive official documents on behalf of the LLP. The registered agent can be a noncommercial registered agent with a street address in South Dakota, a commercial registered agent, or someone involved in the LLP with an office address in the state. However, a domestic LLP, which is an LLP who has chosen to register as an LLP for the first time in South Dakota, can avoid this requirement if it establishes its main office in South Dakota. Every LLP will also need to file paperwork with the South Dakota Secretary of State.
What Paperwork Do I Need to Form an LLP?
There are different paperwork requirements for domestic LLPs and non-domestic, or foreign, LLPs, but all of paperwork for both kinds of LLPs can be filed via mail. Domestic LLPs have to fill out a Statement of Qualification for a Domestic Limited Liability Partnership. The form requires one to provide the name of the LLP and the street address of the LLP’s chief executive office, as well as the main mailing address for the LLP if it varies from the office’s street address. You will also need to provide the appropriate identification and contact information for the LLP’s registered agent if the LLP’s chief executive office is located outside of South Dakota and a deferred effective date for the paperwork if you do not wish for it to be effective upon filing. Finally, the form needs to be signed by at least two of the LLP’s partners.
Foreign LLPs must file a Statement of Qualification for a Foreign Limited Liability Partnership. For this form, you will need to give the LLP’s name, the jurisdiction where the LLP was first registered, the street address of the chief executive office of the LLP, the mailing address for the LLP in the event that it varies from the office’s street address, an effective date for the paperwork if the you want it date to be deferred, and the contact and identification information of the LLP’s registered age. You will also need to get two of the LLP’s partners to sign the form before you send it in, and you will need to send in a Certificate of Existence along with the form.
What Benefits Does South Dakota Give to an LLP?
The profits of an LLP are not taxed twice like a corporation’s profits are. Instead, they are only taxed once, as income through each partner’s personal income tax filing. A major benefit of creating an LLP in South Dakota is that one will not need to pay taxes on any of the profits the LLP earns in South Dakota because the state does not have a personal income tax.
What Disadvantages Does South Dakota Give to an LLP?
South Dakota does require every LLP to file an annual report. If you are late in filing the report, you will be charged a $50 late fee, and if you continue to be delinquent in submitting the report, your LLP could face administrative dissolution.
Should I Hire a Business Lawyer?
Creating an LLP and making sure you file all the right paperwork can be difficult. Hiring a South Dakota business lawyer to help you will make the process of setting up your LLP less stressful.?