Limited Liability Partnerships

Texas introduced the limited liability partnership through 1991 legislation. Texas was the first state to have the LLP, and now all the states have the entity, though a number limit it to licensed professionals. Significant changes were made in the 1997 Texas legislative session.

A Subset of General Partnerships

    The Limited Liability Partnership does not have a comprehensive statute governing it, but rather is set forth in one section of the Texas statute governing general partnerships. Upon failing to achieve or maintain status as a limited liability partnership, the entity is a general partnership, with all of the negative consequences (i.e., liability) of that status. See General Partnerships for more information. What is required to be an LLP is to (a) annually file a report with the Secretary of State, (b) annually pay a fee of $200.00 per partner to the Secretary of State, and (c) maintain a $100,000 liability insurance policy.

No General Liability of Any Partners

A limited liability partnership, like a limited liability company, and unlike a general partnership, provides that no owner is liable for the general obligations of the enterprise. A partner is liable for his own acts, and those of persons he supervises. To obtain this protection from entity liability, the basis of personal liability for one’s own torts is set forth in the statute itself.

Not Limited to Professionals

Any partnership can be a Texas limited liability partnership by following the statutory requirements; the availability of the entity is not limited to personal service businesses, as it is in some other states.
 

This memorandum contains general information and while the information presented is accurate as of the date of its publication, it cannot be relied upon as legal advice, as that can only be obtained through personal consultation with an attorney with whom you share your specific facts.

 Copyright © 2005 by Sterling A. Minor. All Rights Reserved.

Last Updated: May 17, 2005