Before forming a business, it is important to consider the pros and cons of your chosen business structure. This article explains what a Limited Liability Limited Partnership is and how this business entity structure can benefit your business.
To understand what a Limited Liability Limited Partnership (LLLP) is, let us first review what a Limited Partnership (LP) is. A Limited partnership is a partnership with at least one limited partner in addition to its general partner(s). The general partners are fully liable for the partnership’s debts and liabilities, while the limited partners enjoy limited personal liability for the debts and liabilities of the partnership.
A Limited partnership enables an investor who will not be engaged in management to invest in a business without taking on any liability or risk beyond their initial investment in the partnership. The Limited partner usually has no obligation to contribute any additional capital to the partnership and therefore does not have any economic risk of loss due to the partnership's liabilities.
An LLLP is an extension of an LP, wherein both the general partners and the limited partners enjoy limited liability protection. This expanded limited liability protection alone is what differentiates an LLLP from an LP.
Other than that, the characteristics of an LLLP are identical to those of an LP. The limited partners are essentially only investors, while the general partners run the business's day-to-day operations with no input from the limited partners.
The advantages of an LLLP are virtually the same as for an LP:
Note: A Limited Partnership is a state-level entity. Unlike a General Partnership (GP), which can be formed with simply a handshake between two people, formation documents must be filed with the Secretary of State to register the partnership and designate it as an LLLP.
Only an Limited number of states (26) currently provide for the formation of an LLLP. The good news is, however, is that Wyoming is one of those states.
Forming an LLLP in Wyoming can save you money and make your life easier. Wyoming has lower fees, stronger asset protection, and stricter privacy laws than other old-fashioned business havens like Nevada and Delaware.
To form a Wyoming LLLP, you will need to file a Certificate of Limited Partnership with the Wyoming Secretary of state. To do so, download the form from the Secretary of State’s website and complete it, making sure to check the appropriate box to designate your partnership as an LLLP, rather than an LP.
To complete the Certificate of Partnership for your Wyoming LLLP, you will need the following information:
Before you file the Certificate of Limited Partnership with the Secretary of State, you must attach a signed Consent to Appointment from your registered agent as an addendum. You can then submit your Certificate of partnership by mail or in-person, along with a fee of $100.
Once the Secretary of State has your formation documents, it should take no more than two weeks for you to receive confirmation that your Wyoming LLLP is active.
Many business owners consider Wyoming to be the best state in the country for business formation. If you are thinking of forming your partnership in Wyoming, we would be happy to assist you with the process. Call us today to arrange a free consultation with an experienced Wyoming business formation attorney.