A limited partnership (LP) is a business structure that requires more than one owner, known as a partner, to set it up, similar to a general partnership (GP). Unlike a GP, in which all of the partners are general partners, an LP has two types of partners: general and limited. A general partner has primary control over LP, shared equally with other general partners, and is wholly and personally responsible for the LP. Limited partners, on the other hand, are usually not involved in the running the company. Since limited partners are not in charge of the company, they are only directly liable for the amount of money that they have invested into the LP.
In Arkansas, a company cannot be an LP unless it meets a number of requirements. An LP must have at least one limited partner and one general partner. The name for the LP must include “LP”, “L.P.”, or “Limited Partnership.” With just a few narrow exceptions, the name must be unique in comparison to names are already assigned to registered businesses. Another thing that an LP must come up with is an agent for service of process. The agent must be a person or other entity that is capable of receiving official communications and legal documents on behalf of the LP at a street address, not a post office box. Also, all LPs must file the appropriate paperwork with the Arkansas Secretary of State. A domestic LP, which is an LP that has only been established in Arkansas, must also find and maintain an office in Arkansas that will contain several important documents and other information related to the LP, such as copies of all of the LP’s financial statements for the past 3 years and copies of the LP’s three most recent annual reports. Any LP created outside of Arkansas that wants to now do business in the state, also known as a foreign LP, is exempt from the requirement of establishing and maintaining an office in the state.
For a company to register as an LP in Arkansas, the proper paperwork must be filed with the Secretary of State of Arkansas by sending in the completed form through the mail. Domestic LPs must send in a Certificate of Limited Partnership. In order to complete a Certificate of Limited Partnership, you will be required to put down the name and street address for both the LP and the agent for service of process. If the mailing address for either the LP or the agent differs from their street addresses, then the mailing address must also be listed. Each general partner must include their signature, name, and address on the form, as well.
Foreign LPs must send in an Application for Certificate of Authority of Foreign Limited Partnership. This form will require you to provide the name of the LP and any other name that the LP may use in Arkansas if the LP’s original name does not meet the state’s name requirements. You will also have to disclose where and when the LP was originally formed, as well as the type of business in which the LP will engage. Additionally, you will need to provide the names and addresses of the general partners and the agent for service of process. Unlike the Certificate of Limited Partnership, which requires all of the general partners’ signatures, the Application for Certificate of Authority of Foreign Limited Partnership only needs to be signed by one general partner. In addition to sending in the Application for Certificate of Authority of Foreign Limited Partnership, a foreign LP must also mail in a certificate of existence.
Aside from the filing fee for the annual report, Arkansas does not require LPs to pay an annual tax or other annual fee. Arkansas also offers several financial incentives to businesses located in the state. These incentives range from tax credits, such as the InvestArk and Tax Back sales and use tax credits, to grants, such as those offered by the Arkansas Risk Capital Matching Fund and the Seed Capital Investment Program for tech-based companies.
Arkansas requires all LPs to file an annual report, which must be submitted along with a filing fee of $15 by May 1. If an LP does not file the report within 60 days of the May 1 deadline, then the Arkansas Secretary of State may administratively dissolve the company.
Establishing an LP in Arkansas can be complicated, and having a lawyer to assist you can be invaluable. You can find an Arkansas business lawyer here to help you set up your LP.