When starting a business in New York, it is important for entrepreneurs to familiarize themselves with the various business structures that are available to them. One of these options is a limited partnership, which can be a useful structure for businesses that need to provide limited liability and an expansive management team. Before deciding if a limited partnership is the right structure for your business, it is important to understand what a limited partnership is and how it works in the state of New York.

A limited partnership is a type of business structure that is formed when two or more partners join together to form a business. The partnership is governed by a limited partnership agreement that is entered into between the partners. This agreement outlines the rights, responsibilities, and liabilities of the partners. It also outlines the roles that each partner will play in the business.

Under a limited partnership, there are two types of partners: general partners and limited partners. General partners are the owners of the business who are responsible for making decisions and managing the day-to-day operations of the limited partnership. They have unlimited liability for the debts and obligations of the business. In contrast, limited partners are not responsible for managing the operations of the business. They are liable only for the amount of money they invest in the business and have no decision-making power.

In New York, a limited partnership is formed by filing a Certificate of Limited Partnership with the New York Department of State. The certificate must include the names of the general partners and limited partners, the name of the business, and the address of the principal place of business. The general partners must also sign the certificate.

In addition to the filing fee, the limited partnership must also pay an annual filing fee of $50. It is also required to obtain a tax identification number (EIN) and file an annual information statement.

Although a limited partnership in New York provides liability protection to the limited partners, it also has some drawbacks. For example, the limited liability of the partners can be lost if it engages in tortuous or fraudulent activities, or the general partners make decisions outside the scope of the limited partnership agreement. Furthermore, tax laws can be complicated, and it is important to consult with a qualified business attorney with experience in taxation to ensure that all relevant laws are being complied with.

When considering the formation of a limited partnership in New York, it is important to work with an experienced business attorney. An experienced business attorney can help to properly structure the limited partnership agreement and ensure that all relevant laws and regulations are met.

In addition, an experienced business attorney can also help to clarify the inner workings of the business and help to ensure that the partnership operates in a manner that protects the interests of all the partners.

Topics:

Limited Partnership,

New York,

Business Attorney