Moving Beyond the General Partnership to a More Structured Form
In Alabama, general partnerships have historically been a go-to form of doing business. They required no filing or articles of organization, and could exist on the basis of a handshake. However, general partners were jointly and severally liable for all debts of the partnership, and dissolving a partnership or getting rid of an unsatisfactory partner was often time-consuming and costly. The limited liability partnership (LLP) allows for a partnership business form with substantial similarity to the LLC. In an LLP, one partner is not responsible or liable for another partner’s negligence or misconduct. Unlike a “limited partnership,” the LLP allows owning partners to have an active role in management, while being shielded from personal liability.
Like an LLC, and LLP can be formed by registering with the secretary of state’s office. A general partnership can register to become an LLP, thereby limiting their liability by statute. LLPs provide an important vehicle for partnerships, combing elements of partnership and corporate law to allow for limited liability in the partnership context. The probate attorneys at Parkman White, LLP have years of experience with LLPs, and can help you create an entity tailored to your specific needs. Contact our Birmingham legal team today at 205-502-2000, whether you live in Chelsea, Fultondale, Irondale or any area near Birmingham to discuss the pros and cons of the formation of an Alabama LLP.