Chicago Partnership Law Attorneys
A partnership is one of several types of business organizations. Illinois law recognizes four types of partnerships: partnerships, limited liability partnerships (LLP), limited partnerships (LP), and limited liability limited partnerships (LLLP). Unlike corporations, partnerships do not directly pay federal income tax.
While it is not required, partners should collaborate on a partnership agreement that defines their individual rights and duties. Partnership agreements can be complex and should be drafted by a qualified Chicago partnership lawyer.
The type of business organization you form can have a substantial impact on the taxes your business pays and the personal liability you and your partners can face. An Chicago partnership law attorney from Shipley Law Group can help you organize your new business in the way most advantageous to you and your business partners.
Partnerships
A partnership is the default organization formed when at least two persons—a person being an individual or another business entity—enter into a common business enterprise. A partnership can exist even if the partners never sign a partnership agreement or make a formal filing with the Illinois Department of State.
Once you are a member of a partnership, you and your partners are personally liable for any debts or liabilities of the business. Additionally, in the absence of a partnership agreement to the contrary, any one partner has authority to enter contracts on behalf of the business. This can be a dangerous combination. General partnerships have few advantages and Chicago partnership attorneys normally consider them to be a poor option when organizing a business.
Limited partnerships
Unlike a general partnership, the partners must file papers with the Secretary of State and pay a fee of 150 dollars to form a limited partnership. LPs also must file yearly reports accompanied by a fee of 100 dollars.
A LP consists of both general partners and limited partners. General partners run the business and are personally liable for its debts. Limited partners are simply investors whose liability is limited to their investment.
Limited liability partnerships (LLP) and limited liability limited partnerships (LLLP)
In an LLP, the partners are not personally liable for most partnership debts. This is also true in an LLLP, where both limited and general partners enjoy limited liability. The downside to a LLP or LLLP is that they are expensive to form. Depending on the number of partners involved, an LLP can cost up to 2,000 dollars in filing fees. The business must pay these fees annually to re-register as an LLP.
If you are starting a new business or would like to reorganize as an LLP, a Chicago partnership law attorney at Shipley Law Group can help you form the type of partnership that works best for your needs. Illinois law allows an existing partnership to register as an LLP without dissolving, giving you and your partners the benefits of limited liability. Our attorneys know what the state requires before a partnership can reorganize, alter its structure, or make other fundamental changes. A Chicago business lawyer at Shipley Law Group can help your partnership run more smoothly.
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