A limited liability company integrates characteristics of corporations and partnerships, while providing protection, with limitations, to its owners, according to the Internal Revenue Service (IRS). In the United States, this type of business entity is authorized by state statute and Texas was the first state to implement limited liability partner law in 1991, according to 'Lectric Law Library. In Pennsylvania several conditions apply to forming, maintaining and dissolving a limited liability partnership (LLP).
Pennsylvania requires the submission of several forms and fees to the Office of the Secretary of the Commonwealth to complete the business registration process. To establish the business, domestic or foreign, partners must submit the "Statement of Registration Registered Limited Liability Partnership" form, which details information about the business and partners and requires a signature.
Pennsylvania also requires the submission of the "Certification of Annual Registration" if the company existed on December 31st of any year. Along with the form, LLPs are required to submit an annual fee per partner. For example, in 2009 the fee was $310 per registered partner, which would result in a $620 registration fee for a two-partner registration.
Pennsylvania has strict rules that govern the selection of an LLP's name. The company name must not include specific words, such as “engineer,” “university,” “surveying” or “architect,” unless at least one partner has registered with the appropriate professional licensing board. Furthermore, the company name must include the word “company,” “limited liability partnership,” “limited,” or an appropriate abbreviation.
Some of the earlier LLP statutes -- the "First" and "Second" generation statutes -- did not clearly address issues of financial obligation concerning negligent and non-negligent partners. In the past, one partner's negligent act may have caused the business to utilize assets to pay a non-negligent partner’s portion of a jointly liable debt. To illustrate, a non-negligent partner may refuse to utilize personal assets for lease payments, which would raise questions about the non-negligent partner’s breach of financial duty, according to ‘Lectric Law Library.
Today, Pennsylvania’s LLP statute protects partners from liability from negligent acts. As a general rule, partners are protected from acts committed by another partner or representative of the company. Unless a partner agrees in writing that he is liable, he is protected from financial obligation chargeable to the partnership. Furthermore, business conducted outside Pennsylvania is governed by the Commonwealth’s statute.
- 'Lectric Law Library: Limited Liability Partnerships & Limited Liability Limited Partnerships
- Pennsylvania Department of State: Pennsylvania Limited Liability Partnership
- Onecle: Limitation on liability of partners - 15 Pa. Cons. Stat. Sec. 8204
- Onecle: Extraterritorial application of subchapter - 15 Pa. Cons. Stat. Sec. 8207
- Onecle: Name - 15 Pa. Cons. Stat. Sec. 8203
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