Limited Liability Partnership (LLP)
The Kabak Law Group has significant experience determining and implementing the ideal entity for a wide range of businesses. We take the time to get to know our clients' short and long-term business goals, financial situation, concerns about personal asset protection, and more. Then, we devise the form of entity best-suited to addressing our client's concerns and meeting their needs. One such entity is a Limited Liability Partnership (LLP).
LLPs share certain similarities with general partnerships. For example, all of the partners have the right to actively manage the day-to-day business affairs. However, all the partners in an LLP receive limited liability protection. In California, ownership of an LLP is limited to licensed public accountants, lawyers, or architects.
To form a California LLP, the business must register with the Secretary of State. In the case of LLPs formed in other states, the LLP cannot conduct business in California prior to registering with the California Secretary of State.
Factors to consider in forming an LLP include:
- An LLP offers flexibility
- Partners determine organizational structure and each partner's share of profits and losses
- A written partnership agreement is desirable
- LLP does not pay tax on income, but is required to pay a minimum tax each year
- Partners file a Schedule K-1 paying taxes on partner distributions
- LLP is designed for certain specific professional services
- An LLP enables active partner participation in management and provides the benefit of limited liability protection
- An LLP remains in existence until the date of termination agreed upon by the partners
The experienced California LLP lawyers at Kabak Law Group can determine whether a Limited Liability Partnership is the proper choice for your prospective business, and scrupulously design the entity to accomplish all of your goals.
