Top 5 Things to Consider with Limited Liability Partnership in Chicago
Starting a Limited Liability Partnership: A Great Choice for Business Partners2 min read
Starting a limited liability partnership (LLP) can be a great choice for those who want to conduct business with a partner without having to commit to becoming a corporation. Most commonly, LLPs are created between lawyers and accountants who join forces to offer business services at a professional level. Whether you and your partner are just starting out in Chicago or you are seasoned veterans, there are five key elements to consider to help ensure your LLP is compliant with local regulations.
1. Registering the LLP with the Secretary of State
The first step in forming your LLP involves filing Articles of Organization with the Secretary of State. When you submit your Articles, you are required to establish the name of your partnership, its purpose, the duration of the LLP (such as indefinite or up to a certain date) and the name of the LLP’s registered agent. This registered agent receives all important notifications on behalf of the LLP such as taxes, notices of lawsuit, etc. and helps in protecting the liability of the existing partners in the LLP.
2. Drafting an LLP Agreement
Before the LLP can begin conducting business, an LLP agreement should be developed that outlines the LLP’s purpose, how assets and profits will be divided, what happens when a partner leaves or if the LLP is dissolved, etc. This agreement is essential to ensure that everyone involved is on the same page and in case of any unexpected situations or disputes, you are aware of what to do to alleviate the dispute.
3. Obtaining an Employer Identification Number (EIN)
All businesses, including LLPs, need an Employer Identification Number (EIN). This number helps to identify your business from other LLPs in your industry and to be able to receive a tax ID number. This number is especially important for those in the legal or accounting professions as it helps to obtain important business credits like the professional liability insurance.
4. Applying for Necessary Permits and Licenses
Every state has different requirements for the type of permits and licenses that are needed to operate a business. Depending on the type of services you plan to offer, you may need a professional license, such as for lawyers or physicians, or a business license for retail accounts. It is also important to check with the city and county of Chicago to ensure you have all the necessary permits and licenses in place.
5. Utilizing the Services of an Experienced Business Attorney
When starting any business, it is wise to consult with an experienced business attorney who is familiar with the laws and regulations in your area. This is especially true when it comes to LLPs as there can be specific requirements for each state. An experienced business lawyer can help to ensure that your LLP is compliant with all state and local regulations and can also act as an invaluable resource for any legal questions that may arise.
Since each situation varies and may require knowledge of the particular laws and regulations, it is important to seek the help of experienced professionals. UpCounsel’s network of experienced business lawyers can help provide you with the legal advice and resources necessary to ensure your LLP is established in accordance with your desired framework and local regulations.
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