A limited liability partnership (LLP) in the state of Texas, as well as most states in the United States, is a business structure allowing professional business partners to limit their personal liability for the actions of other partners. It offers the same limited liability benefits as a corporation but provides the flexibility of a general partnership. LLPs are governed by state law and understanding the features and regulations of a limited liability partnership can help ensure successful business operations. This article offers guidance on frequently asked questions related to limited liability partnerships in Dallas, Texas.

What are the advantaged of an LLP?

LLPs are advantageous for professional businesses, allowing increased liability protection for partners. Exactly who may receive the protections of an LLP vary by state, but generally, include professionals such as lawyers, physicians, accountants, architects, and others. With an LLP, partners are not personally liable for another partner’s negligence or misconduct. LLPs also offer more favorable tax treatments for businesses in some states.

How do I go about forming an LLP?

As an LLC, an LLP is formed by filing state-specific paperwork, paying a fee and registering your business name. When forming an LLP, you should take the time to develop a specific legal structure and specialty of the practice. This will allow for the business to regularize accounting, offers passengers more protection, and make the company easier to start. Of particular importance is developing the rules and regulations of operating a limited liability partnership according to state statutes. It can be beneficial to consult with an experienced lawyer to ensure your LLP is formed with careful, legal due diligence.

What conditions must my LLP meet?

Each state has their own rules and regulations concerning LLPs, but most require a separate partnership agreement regulating how the business will be run. This agreement should include provisions such as partners' responsibilities, dispute resolution processes, exits procedures, and the process for creating and managing a business. Additionally, all LLPs must register with the Secretary of State and must provide sufficient notice of their intent to form the LLP and of the name, address, and purpose for the LLP. These notices must be separately filed in each county in which the LLP conducts business or where a partner resides or carries on business.

What taxes must my LLP consider?

Under Texas law, LLPs are not generally subject to entity-level state and/or federal taxes, so it is important to keep the business’ income and losses separate from the partner’s individual income and losses. It is best to consult a legal and/or tax professional to determine the specific taxes applicable to the LP, including any costs associated with the registration or maintenance of the LLP. Additionally, the LLP should establish a payroll tax system and manage the payment of any applicable payroll taxes, as well as filing employment and withholding taxes with the IRS.

Where can I find experienced legal counsel to advise my LLP?

When working with a legal professional, it is important to keep in mind your company's needs and financial circumstances. Do research to find lawyers who specialize in business LLP formation. Many experienced lawyers are available for consultation and can advise you on LLP formation, maintenance, and all other aspects of running a successful limited liability partnership.

What other resources might be useful for my LLP?

The Texas Secretary of State’s Office has helpful resources and information for businesses looking to form a LLP in Texas. Additionally, your lawyer should provide guidance on the requirements and regulations associated with forming a LLP.

Topics:

Limited Liability Partnership,

Dallas,

Texas