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Limited Liability Limited Partnership
A Limited Liability Limited Partnership is a recently introduced unincorporated business entity that is a modification of the Limited Partnership.
Advantages of a Limited Liability Limited Partnership
The advantages of using an LLLP with an individual general partners is that the Partnership is able to still avoid personal liability but save the complexity and cost of establishing and maintaining a Corporate General Partner.
Disadvantages of a Limited Liability Limited Partnership
- LLLPs not recognized by every state
- Unreliable/untested liability protection
Limited Liability Limited Partnerships are not yet recognized by every state. Unlike Corporations which are recognized globally and have been thoroughly tested and proven reliable in countless court cases, because Limited Liability Limited Partnerships are so new, the degree to which their partners are personally shielded from business liability and debt has been relatively untested and has yet to be proven for reliability in various situations.
Recommendations for a Limited Liability Limited Partnership
Any existing Limited Partnership (LP) can convert to an Limited Liability Limited Partnership, thereby providing liability protection for the General Partner. LPs with Corporate General Partners can amend their agreements, dissolve the Corporate General Partner, replacing it with an Individual Limited Partner.
Formation of a Limited Liability Limited Partnership
Forming a Limited Liability Limited Partnership usually involves converting a Limited Partnership into an LLLP. Therefore, there may be additional fees associated with this conversion. Because LLLPs are a relatively new type of business entity, many states do not have statues yet that provide guidelines for LLLP formation. It is important to check with the State you are interested in operating in to see if LLLPs are allowed in that state.