What Is a Florida Limited Liability Limited Partnership?
The Florida limited liability limited partnership business structure was formed in 1999 when the legislature in Florida moved forward with CS/HB 361.3 min read
The Florida limited liability limited partnership business structure was formed in 1999 when the legislature in Florida moved forward with CS/HB 361, which made small changes to Florida Statutes 620.8101 to make available limited liability limited partnerships (LLLP) and limited liability partnerships (LLP).
Limited Liability Partnerships
The LLP is a general association where no partners have singular accountability for the deeds of the collaboration. An LLLP is a restricted association where the common partner is not personally responsible for acts that take place in a limited partnership. Estate protection planning is important when it comes to an LLLP. In the past, attorneys would form limited collaborations with a general partner in the corporate world so that no one would reveal themselves to individual liability since they were a general partner.
An LLLP's common partner is kept safe by the law above from responsibility for acts in a limited partnership. Someone who is a common partner of a restricted liability limited collaboration exposes himself to no liability. A benefit of using an LLLP with one common partner is that this relationship saves the complexity and cost of starting and retaining a different legal person (the corporate common partner) to stay away from personal responsibility. A limited partnership that exists can be a restricted responsibility limited collaboration and take away the hardship of responsibility from the common partner.
Limited partnerships accompanied by corporate general partners can dismiss the corporate general partner, change their agreements, and replace it with a single limited partner. To become a limited liability general partnership or a limited liability limited partnership, a statement of qualification must be filed by the partnership with the State of Florida and pay a filing fee of $25.
Filing the statement of qualification does not do anything to any other parts of the existing partnership agreement. There is no reason that a partnership should not file a statement of qualification if they are concerned about the general partners' liability so that they can become a limited liability partnership.
Florida Limited Liability Partnerships
The preferred form of limited partnership is the Florida limited liability limited partnership. Partnership obligations include ones incurred while an LLLP, no matter if in contract, error, or in other ways. No other partners are personally responsible for these obligations. This is why the LLLP form of collaboration is the favorite type of a limited partnership. An exception is when the general partner's liability qualify of a LP is needed by creditors such as lenders.
A Florida LLLP is similar to a general collaboration; although it has two different types of partners. A general partner is part of an LLP and watches over the business. The limited partner is usually a shareholder who gives capital to the business but is not involved with the management. The limited partner has no personal liability for business claims and debts as long as they have never done anything in management. The LP can be changed to a LLLP if a partner desires to protect its common partner of the present limited partnership.
Income taxation of LLP and LLLPs, considering income tax purposes, are usually regarded as common general partnerships, where all the partners are singularly paying taxes and reporting on their portion of profits every year. A descriptive partnership tax return of salary is filed by the LLLP, and every partner gets IRS Schedule K-1 (1065), deductions, partner's share of income, credits, and other similar documents from the collaboration. Every partner files the form along with their with their singular IRS 1040 tax return.
As a rule, limited partners do not have to return self-employment taxes due to not being operational in the business. The self-employment tax does not consider their part of collaboration income “earned income."
Florida LLCs and Family Limited Partnerships Asset Protection
There are three types of Florida business organizations that have important benefits for asset protection. These are:
- Florida limited partnership (LP)
- Florida limited liability limited partnership (LLLP)
- Florida limited liability company (LLC)
A limited partnership in Florida is a consensus between two partners, limited partners and general partners, to invest in an asset or do business. The partnership conditions and terms can be seen in a written limited partnership agreement.
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