Missouri Limited Liability Partnership
A Missouri limited liability partnership gives all partners limited liability and the freedom to manage the business as though they were general partners.3 min read
2. Forming a Limited Liability Partnership
3. Application to Register a Limited Liability Partnership
4. Dissolution of Previous Partnership
5. Partnership Agreement
7. Benefits of Limited Liability Partnerships
A Missouri limited liability partnership gives all partners limited liability and the freedom to manage the business as though they were general partners. All partners in a limited liability partnership can be involved in the active management of the business, unlike the setup in a limited partnership formation.
About Limited Liability Partnerships
When new businesses are being formed, partnerships are one of the most common choices. In a general partnership, the partners are personally liable for some of the financial obligations of the business. This is not the case with a limited liability partnership (LLP).
Businesses that provide professional services such as accounting and law are frequently formed as an LLP. In the state of Missouri, any business can register as a limited liability partnership. This is possible as long as there is a minimum of two partners. A sole proprietor cannot form an LLP.
Forming a Limited Liability Partnership
For any partnership operating under a name other than the partners' surnames, the business name must be registered with the state. The business name must denote the limited liability partnership status by the inclusion of "LLP" after the business name. The name of a foreign registered LLP or a registered US limited partnership must be distinguishable from other business names already registered and in the Secretary of State record database.
This includes names for:
- Limited partnerships.
- Limited liability companies.
- Business trusts.
- Foreign registered limited liability partnerships.
- Registered limited liability partnerships.
It is possible to reserve the entity name by filling out a name reservation form. This reserves the name for 60 days.
A registered agent must be designated for the limited liability partnership. The registered agent is authorized to accept important paperwork/documents for the business. A business lawyer can help you with the process of selecting an agent.
Application to Register a Limited Liability Partnership
To form a limited liability partnership, the registration application must be filed with the Missouri Secretary of State. The registration application form will require the following information:
- Partnership name.
- Resident agent's name and physical address.
- The purpose of the limited liability partnership.
- The number of partners.
- Any additional information you or the other partners want to provide.
- Signatures of authorized partners or signatures from the majority of partners.
The fee for the initial registration of a limited liability partnership in Missouri varies since it is dependent on the number of partners, but the fee cannot exceed $200. The status of LLP is in effect for one year once the registration is completed. Registration must be renewed each year.
Dissolution of Previous Partnership
Under Missouri law, registering as a limited liability partnership does not affect or dissolve a previous partnership. Registering extends the shield of liability to the other partners involved. The special registration process and renewal procedures are necessary to acquire limited liability status. The maintenance, ownership, and management of the LLP are still handled like those of a general partnership.
It is recommended that a partnership agreement be drafted. The agreement outlines each partner's rights and responsibilities within the company. This could include procedures such as the addition of new partners, the process of distributing profits, and the termination of the partnership. In the event of a legal dispute, a written partnership agreement can prevent lengthy litigation.
Limited liability partnerships are not a tax-paying entity structure. While business activities are reported to the IRS, the taxes are paid individually by each partner. The income from the LLP passes through to the partners, who in turn report the income to the IRS. How much each pays is determined by the percentage of the shares they hold in the business.
Benefits of Limited Liability Partnerships
An LLP's debts and/or a partner's poor choices resulting in negligence or misconduct are also not your responsibility. This means your personal assets cannot be used to take care of a partner's debts unless you chose to guarantee payment. You are only financially responsible for your own actions.
LLP partners in Missouri are not protected from all business liabilities, such as personal misconduct or neglect. Purchasing liability insurance can help offset these potential risks.
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