At the Piatchek Law Firm, our attorneys assist clients with a variety of limited liability partnership (LLP) concerns. Missouri law allows for the creation of a limited liability partnership, which generally permits one partner to be shielded from individual or joint liability for partnership obligations created by another partner’s misconduct. A partner’s liability may not be limited, however, if the misconduct took place under the supervision or control of the partner.
Only liability arising from the misconduct of other partners or persons is usually covered by this law. The partnership is generally not relieved from liability for other partnership obligations, and individual partners are liable for their own misconduct.
Forming a Limited Liability Partnership in Missouri
To formally register as an LLP in the state of Missouri, a partnership business must file an application with the Secretary of State. LLP status is good for one year after the registration is completed and must be renewed each year thereafter. The fee for the initial registration of a limited liability partnership in Missouri depends on the number of partners involved but cannot exceed $200. Missouri law specifically states that registering as a limited liability partnership does not dissolve a previous partnership; it merely extends the liability shield to the other partners involved in the business.
Other than the special registration and renewal procedures necessary to acquire limited liability status, all other management, ownership, and maintenance issues of a limited liability partnership remain the same as those of a general partnership.
Difference from a Limited Partnership
Unlike a limited partnership business formation, all partners involved in a limited liability partnership can be actively involved in the management of the business. In a limited partnership, the limited partner must act only as a passive investor if they wish to retain their liability shield. In contrast, the limited liability partnership formation gives all partners limited liability as well as the freedom to manage the business as if they were general partners.
Limited Liability Partnerships and Taxes
A limited liability partnership is not a tax-paying entity. An LLP is required to report its business activities to the IRS, but taxes are paid individually by each of the partners in proportion to their percentage of shares in the business. One major advantage to the limited liability partnership structure is that it allows individuals to gain limited liability protection without interfering with the company’s tax status.
How a Business Attorney Can Help
At the Piatchek Law Firm, our knowledgable business attorneys can help you decide what kind of business formation would best serve your interests. The laws concerning business formations are complex and vary from state to state. The expertise of an experienced business attorney may be invaluable to setting up your business correctly the first time around. For assistance forming or managing a limited liability partnership, call us at 417-882-5858 or send us an email to schedule a complimentary consultation.