Limited partnerships (LP) are a specific way to structure a business. Other types of business structures include limited liability companies (LLCs) and corporations. An LP is made up of two distinct types of partners: limited and general.
Limited partners usually only provide money and act as silent investors. In exchange for their lack of involvement, limited partners enjoy limited liability for the actions of the company, and they are only liable up to the amount of money they invested in the business.
In contrast, a general partners are in charge of running the LP, and are personally and completely liable for the LP. In order for it to be a valid LP in the state of Utah, you will have to register your LP with the Utah Department of Commerce, Division of Corporations and Commercial Code.
Utah has a number of requirements for a company to satisfy if it wishes to be formed as an LP. One requirement is that the LP needs to have at least one general partner and one limited partner. The name of the LP must include the term “limited partnership”, or the abbreviation “L.P.” or “LP”.
You also have to appoint a registered agent who will be served on behalf of the business. Only Utah residents over the age of 18, corporations that are registered to do business in Utah, and LLCs registered to do business in Utah are allowed to serve as registered agents for an LP.
In order to successfully register your LP, you have to fill out certain paperwork. Once completed, the documents can be submitted either online or by filling out the form and sending in two copies to the Utah Department of Commerce Division of Corporations and Commercial Code through mail, email, fax, or in person.
If are seeking to register a domestic, or in-state, LP, you will need to complete a Certificate of Limited Partnership. This form will require you to state the names and addresses of the LP, the registered agent, and each general partner. The person filling out the paperwork will also need to sign the document. You have the option to include the purpose of the LP, although you are not necessarily required to do this.
If you are looking to register a foreign, or out-of-state, LP, you will be required to fill out a Foreign Registration Statement (Limited Partnership) form. Although the form has the same basic requirements as the Certificate of Limited Partnership, you do need to provide a bit more information. The additional information that you will need to provide includes any other names the company used, as well as the jurisdiction where the LP was originally formed.
For limited partnerships in the state of Utah, the filing requirements and paperwork can sometimes be intensive. It may be necessary to work closely with a legal professional, who can help ensure that all requirements are met and filed in the appropriate time frame.
Throughout Utah, private entities and local governments have set up business incubators and resource centers. These are designed to help new and growing companies flourish. For instance, the BioInnovations Gateway provides life science companies with various equipment and workspaces. Another incubator/resource center is the Eagle Mountain Incubator & Business Resource Center, which offers business counseling, office space, and other valuable resources.
Another benefit associated with LPs in general is that they typically will not dissolve if a limited partner withdraws from the organization. This is because limited partners generally do not take a part in the leadership or management aspects of the partnership. This can allow for different adaptations and adjustments to be made in the long run without totally disrupting the business operations.
Utah requires that LPs renew their business every year for a fee of $15, with an additional $10 for late filings. This is important, because if you do not renew your LP, it will be automatically dissolved by the state.
Unlike other states that are more lax about a limited partner’s involvement, Utah is quite strict on prohibiting limited partners from managing the business. If a limited partner becomes involved in the management of the LP, they will lose their limited partner status.
Lastly, there may be specific items or provisions in the limited partnership agreement or contract that may affect the rights of individual partners. These should be reviewed carefully prior to signing in order to avoid potential violations, conflicts, or legal disputes. In the event of a dispute, legal action may be necessary to resolve the issues and allow the business to continue its operations.
It is important to consult with a Utah business lawyer when forming an LP. A business lawyer in your area can help ensure that your LP is set up properly. In addition, your attorney can provide legal representation in the event of a lawsuit.