By Fredrick P. Niemann, Esq. of Hanlon Niemann, a Freehold, NJ Partnership Attorney
This is the final post on partnerships in New Jersey. In our prior two posts, we generally looked at all three forms of partnerships; general partnerships, limited partnerships and limited liability partnerships, under New Jersey law. We then dissected each form of partnership to look at their key characteristics. We’ll do the same thing now for a limited liability partnership.
Limited Liability Partnerships (LLPs)
The Uniform Partnership Act (“UPA”) also governs New Jersey limited liability partnerships (“LLP”). An LLP is a form of general partnership that has elected to become an LLP. An LLP is created by filing with the New Jersey Secretary of State a document called a “statement of qualification”. The statement of qualification must include the following information:
· the name of the LLP;
· the street address of the LLP’s principal office and the street address of an office in New Jersey if it carries out business in this state;
· the name and street address of the LLP’s agent for service of legal process (lawsuits);
· a statement that the LLP elects to be recognized as a limited liability partnership; and
· an effective date of the partnership, if any.
In general, an LLP is managed and operated the same way as a general partnership. The limited partnership agreement governs the rights and obligations between the partners and the LLP. New Jersey partnership law allows the partnership agreement to modify and/or omit many of the default provisions of the UPA that address the relations among the partners.
What makes an LLP very attractive is its limited liability. Partners of an LLP are treated differently than partners of a general partnership. How? Partners of an LLP are not personally liable for the debts and obligations chargeable to the LLP or to each of the partners, whether the cause of the liability is created by contract, negligence or otherwise. That liability is assumed by the LLP as an entity. Notwithstanding the above, each partner of the LLP is personally liable for his or her negligent or wrongful acts or misconduct. Other than this difference, however, LLPs are subject to the same legal requirements as general partnerships.
To discuss your NJ partnership matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at email@example.com. Please ask us about our video conferencing consultations if you are unable to come to our office.