Limited liability limited partnership
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| Business trust · LLC · LLLP Series LLC Delaware corporation Nevada corporation |
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| Limited company (By shares · By guarantee) (Public · Proprietary) |
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| Contract · Civil procedure |
The limited liability limited partnership (LLLP) is a relatively new modification of the limited partnership, a form of business entity recognized under US commercial law. Like a limited partnership, an LLLP is a limited partnership and as such consists of one or more general partners and one or more limited partners. The general partners manage the LLLP, while typically the limited partners only have a financial interest.
The difference between an LLLP and a traditional LP is with respect to the general partner's liability for the debts and obligations of the limited partnership. In a traditional limited partnership the general partners are jointly and severally liable for the debts and obligations of the limited partnership; limited partners are not liable for those debts and obligations beyond the amount of their respective capital contribututions.
In an LLLP, by having the limited partnership make an election under state law, the general partners are afforded limited liability for the debts and obligatons of the limited partnership that arise during the period that the LLLP election is in place. Certain LLLP elections take the form of the limited partnership electing to be a limited liability partnership (this is the format used in, for example, Delaware) while in other states the election is made in the certificate of limited partnership (examples being Florida, Hawaii and Kentucky). Most states require that a LLLP identify itself in its name, but those requirements are not universal.
Because the LLLP is so new, its use is not widespread. Colorado, Delaware, Florida, Georgia, Maryland, Nevada, Texas and Kentucky all have adopted statutes that allow for the formation of LLLPs, usually as a conversion of an existing LP (the general partners might want to do this to reduce their legal liability).
The filing fees of a LLLP vs. a Limited Partnership are generally higher. In the case of Nevada, the Secretary of State charges $75 to register a limited partnership and $100 to register an LLLP. Additionally, the initial and annual report filing for an LLLP in Nevada is $175 vs. $125 for a Limited Partnership.
LLLPs are most common in the real estate business, although other businesses can use the form as well, for example, CNN. There exists significant questions regarding whether the limited liability provided general partners by the LLLP election will be effective in states that do not have an LLLP statute. [1]
