Partnerships are one of the oldest business structures available, but not all partnerships offer liability protection for the partners. In Georgia, you can start a limited liability partnership from scratch, or you can convert your general partnership into an LLP. Creating a limited liability partnership for your business involves filing an election of this business type with your court clerk.
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Georgia allows four types of partnerships: general, limited, limited liability limited partnership and LLP. General partnerships offer no liability protection for any partners. Limited partnerships have two types of partners, limited and general, and only limited partners have liability protection. Limited liability limited partnerships are limited partnerships that offer liability protection to the partnerships’ general partners as well as the limited partners. LLPs function like general partnerships, but they offer limited liability to all partners, meaning a partner is generally not exposed to any more liability than his investment in the partnership.
Choosing a Name
Once you decide that you want to register as an LLP, you must choose a name for your business. As long as the name you want is not in use by another similar company, you can create any name you want. However, it must include the words “limited liability partnership” or the abbreviation “LLP” or “L.L.P.” This lets the public know that your company is a limited liability partnership so they know your liability limits if they choose to do business with you.
Making an LLP Election
To form an LLP or change your general partnership into an LLP, you must make a limited partnership election in the office of the clerk of the superior court in a county where you have an office or will operate. Your election must state the name of your partnership, the profession in which your partnership operates, that your partnership is making a limited liability partnership election and that your election is authorized by the partners. Your election must be signed by a majority of the partners or by a partner who has authority to sign the election on his own.
Effectiveness of Election
Unlike some other business structures, LLPs do not have to register with Georgia’s Secretary of State. However, the limited liability protections of an LLP do not become effective until you record your election with the clerk. You can also record your election now but delay its effective date until a date you specify in your election statement. Once your LLP comes into existence, it continues to exist forever, but you can terminate it by filing a cancellation statement with the same clerk where you filed your election. There is no annual renewal or annual fee requirement, though the clerk can charge a fee for the initial filing.