How to Start a Limited Liability Partnership in Indiana | 2024 Guide

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Start a Limited Liability Partnership in Indiana

A Limited Liability Partnership (LLP) is a popular business structure offering the flexibility of a partnership while providing limited liability protection like starting an LLC in Indiana. LLP structure is ideal for attorneys, accountants, and consultants. If you’re considering starting a Limited Liability Partnership in Indiana, this comprehensive guide will walk you through the necessary steps, from researching and planning to ongoing compliance and reporting requirements.

Webinarcare Editorial Team will help you gain knowledge through thorough research and market study. Before starting your Indiana LLP, all the steps in this article must guide you.

Steps in Starting a Limited Liability Partnership in Indiana

What is a Limited Liability Partnership?

Forming an LLP is like starting an LLC as well. However, there are differences in terms of it. A Limited Liability Partnership (LLP) is a type of business structure that combines elements of partnerships and corporations. It allows multiple individuals, known as partners, to jointly own and manage the business while providing limited liability protection to each partner. This means that each partner’s assets are generally protected from the debts and liabilities of the business, and they are only liable for their investment in the partnership.

LLPs are popular among professional service providers, such as lawyers, accountants, and consultants, as they allow for flexible management structures and profit-sharing arrangements. The partners in an LLP can directly manage the business, unlike forming a Corporation in Indiana, where a board of directors typically handles the management.

Each partner’s liability is also limited to the extent of their investment, and they are not personally responsible for the negligence or misconduct of other partners. This is a key difference between an LLP and Indiana General Partnership, where partners have unlimited liability for the partnership’s actions and other partners.

It is suggested that you speak with a legal professional before you begin setting up your limited liability partnership. They’ll understand what’s best for you and your company. To safeguard your personal assets from business debts, you can always start an LLC rather than a limited liability partnership.

– WEBINARCARE EDITORIAL TEAM

Steps in Starting a Limited Liability Partnership in Indiana

To form a limited liability partnership in Indiana, you must consider following the below guidelines that include research and planning, choosing an LLP name, designating a Registered Agent, filing for Articles of Organization, drafting a partnership agreement, get an EIN, obtaining necessary licenses and permits, the opening of business bank account and maintain ongoing compliance and reporting requirements. 

Step 1: Research and Planning

Before forming an LLP in Indiana, you must familiarize yourself with the state’s laws and regulations governing LLPs. Conduct thorough research to determine if an LLP is the right business structure for your needs, and create a detailed business plan outlining your goals, strategies, and financial projections.

Step 2: Choose an LLP Name

Selecting a unique and appropriate name for your LLP is crucial. First, check the availability of your desired LLP name with the Indiana business registry. Ensure that your chosen name follows Indiana naming guidelines and requirements, which typically include the use of “Limited Liability Partnership” or “LLP” in the name. You can register and reserve the name with Indiana Secretary of State if desired.

Here are some guidelines you must follow while naming your LLP in Indiana- 

  • Be distinguishable from other businesses registered in your state
  • Include the words “Limited Liability Partnership,” “LLP,” or a similar abbreviation.
  • Not include words that are restricted by your state
  • Ensure that your chosen name does not infringe on any existing trademarks or intellectual property rights.

However, to check the availability of your desired LLP name, you can also search the Indiana Secretary of State business name database and Indiana Business Name Search. If the name is available, you may choose to reserve it for a specific period of 120 days by filing a name reservation application and paying the online name reservation fee of $20 and mail name reservation fee of $20. If your LLP plans to operate under a name other than its legal name, you may also need to register a fictitious or “Doing Business As” (DBA) name. 

The DBA filing can be done by two methods, by mail and in person, which costs around $35. In addition, the DBA’s validity in Indiana is Indefinite, which you can file in the Indiana Secretary of State.

You can check out how to file a DBA in Indiana for clearer understanding.

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Step 3: Designate a Registered Agent

In Indiana, you’ll need to designate a Registered Agent for your LLP. The Registered Agent is responsible for receiving the partnership’s important legal and tax documents. Choose a qualified individual or Indiana Registered Agent Services to serve as your LLP’s Registered Agent, ensuring that they meet Indiana requirements.

However, If you plan to become a Registered Agent of your own LLP, follow the steps below. Also, this applies a guideline in hiring your registered agent.

  • Research the requirements in the state where you want to offer your service. Each state has specific criteria, such as having a physical address and being available during normal business hours.
  • Obtain a physical address in the state(s) if needed.
  • Be familiar with the rules, regulations, and compliance requirements for businesses in your state.
  • Create a business plan outlining your services, pricing, and marketing strategy.
  • Register your business entity, such as an LLP, if required.

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Step 4: File a Certificate of Limited Liability Partnership

To officially form your LLP, you must file a Certificate of Limited Liability Partnership with the Indiana Secretary of State. Obtain the necessary forms and provide the required information, such as the LLP name, principal office address, registered agent’s name and address, names and addresses of partners, and management structure. Pay the required filing fee and submit the completed forms to the Indiana Secretary of State’s office.

Step 5: Draft a Partnership Agreement

A well-crafted partnership agreement is essential for governing your LLP and protecting the interests of its partners. This document should cover crucial provisions such as roles and responsibilities of partners, profit and loss sharing, decision-making processes, partner admission and withdrawal, and dispute resolution. Consider having the partnership agreement reviewed by an attorney to ensure its completeness and compliance with Indiana laws.

A partnership agreement should include the following:

  • Business name
  • Description of the business
  • Contact information of the business and its owners

Ownership of all business partners, decision-making, capital contribution, profits and distribution, death and disability, and withdrawal and addition of partners is one of the key factors to consider when forming or creating a partnership agreement. In this way, all business partners will understand what this is all about and how to proceed if the mentioned scenarios happen. 

Without a partnership agreement, your company will often be subject to the general partnership default laws of Indiana. The default laws in Indiana might not be appropriate for your requirements.

Step 6: Get an EIN

Your LLP must obtain Indiana Employer Identification Number (EIN) from the Internal Revenue Service (IRS). The application of an EIN can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

After you have your EIN, you can benefit in several ways. It will give your LLP the absolute advantage necessary to operate at full capacity without encountering legal or judicial issues.

Step 7: Obtain the Necessary Licenses and Permits

Depending on your specific industry, you may need to obtain Indiana Business Licenses and permits to operate your LLP. Research your business’s licensing and permit requirements and apply for them accordingly.

You can check out the United States Business License & Licensing Fee Resources for more information about the costs in Indiana.

Step 8: Open a Business Bank Account and Obtain Insurance

Maintaining clear financial records is crucial for any business, so open a separate bank account for your Indiana LLP. Additionally, obtain the necessary Indiana Business Insurance, such as general liability insurance, professional liability insurance (if applicable), and workers’ compensation insurance (if you have employees). 

Check the Best Bank for Small Businesses in Indiana to open a bank account.

Step 9: Maintain Compliance and Reporting Requirements

Stay informed about and comply with relevant laws and regulations to keep your LLP in good standing. File Biennial Reports with the Indiana Secretary of State (if required), maintain accurate financial and operational records, and file and pay required taxes at the federal, Indiana, and local levels.

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Advantages of Forming a Limited Liability Partnership in Indiana

While the specific advantages of forming an LLP in Indiana can vary depending on the state’s unique laws and regulations, several public benefits associated with LLPs often apply across jurisdictions. Here are some advantages to consider when forming an LLP in Indiana:

  • Limited Liability Protection: One of the main benefits of an LLP is its limited liability protection to its partners. This means that each partner’s assets are generally protected from the debts and liabilities of the business, and they are only liable for their investment in the partnership.
  • Pass-through Taxation: An LLP typically enjoys pass-through taxation, which means that the profits and losses of the business are passed through to the partners, who report them on their personal income tax returns. This avoids the double taxation often associated with corporations.
  • Flexible Management Structure: Unlike corporations requiring a board of directors, LLPs allow for a more flexible management structure. Partners in an LLP can directly manage the business and make decisions without needing a formal board.
  • Profit-sharing Flexibility: The partnership agreement can outline the distribution of profits and losses among partners, allowing for a customized profit-sharing arrangement based on the partners’ preferences and contributions.
  • Easier Formation and Compliance: Forming an LLP is generally less complicated and expensive than forming a corporation. Ongoing compliance requirements may also be less burdensome than other business entities, depending on the specific laws and regulations in Indiana.
  • Professional Credibility: Forming an LLP can enhance your business’s professional credibility, as it demonstrates a commitment to a formal business structure and can offer reassurance to clients, customers, and potential investors.

Bear in mind that the advantages of forming an LLP in Indiana may vary based on the specific laws and regulations governing LLPs. Researching the applicable laws and consulting with legal or financial advisors is essential to fully understand the benefits and requirements of forming an LLP in Indiana.

Cost of Forming an LLP in Indiana

The cost of forming an LLP in Indiana may vary depending on the required filing fees and any additional services you may need. The filing fee for a Certificate of Limited Liability Partnership typically ranges from $50 to $200, depending on the state.

Can I Form an LLP in Other States?

You can form an LLP (Limited Liability Partnership) in other states. To form an LLP in a different state, you must follow that state’s specific registration requirements and filing procedures. This usually involves filing an application or certificate of registration, paying a registration fee, and obtaining any necessary permits or licenses.

Additionally, you may need to register your LLP as Indiana Foreign LLC if you plan to conduct business in multiple states. It is advisable to consult with an attorney or a business consultant familiar with the laws and regulations of the state where you plan to form your LLP.

Can an LLP Need to Have One Owner?

An LLP (Limited Liability Partnership) cannot have just one owner. By definition, an LLP is a partnership, which means it requires at least two partners to be formed. If you want a business structure with limited liability protection and only one owner, you may consider forming a Single-Member LLC in Indiana instead. An LLC can have one or more owners, known as members, and offers limited liability protection and pass-through taxation. The requirements for forming an LLC will vary by state, so consult your state’s laws and regulations.

FAQs

What is a limited liability partnership in Indiana?
A limited liability partnership in Indiana is a type of business structure that offers protection to partners from the debts and liabilities accrued by the business.
Are there any residency requirements for starting a limited liability partnership in Indiana?
No, there are no specific residency requirements for starting a limited liability partnership in Indiana.
What are the filing fees for starting a limited liability partnership in Indiana?
The filing fee for starting a limited liability partnership in Indiana is $100.
Do I need to register my limited liability partnership in Indiana with any agency or organization?
Yes, you will need to register your limited liability partnership in Indiana with the Indiana Secretary of State.
Can one person start a limited liability partnership in Indiana?
No, a limited liability partnership in Indiana requires at least two partners.
Is there a limit on the number of partners allowed in a limited liability partnership in Indiana?
No, there is no limit on the number of partners allowed in a limited liability partnership in Indiana.
How are the profits and losses split amongst partners in a limited liability partnership in Indiana?
In a limited liability partnership in Indiana, profits and losses are divided amongst partners equally, unless established differently in the partnership agreement.
What is a registered agent in Indiana, and do I need one for my limited liability partnership?
A registered agent is a designated person or entity that is responsible for receiving legal documents on behalf of the business. Yes, a limited liability partnership in Indiana must appoint a registered agent.
Can a limited liability partnership in Indiana be taxed as an S corporation?
Yes, a limited liability partnership in Indiana can choose to be taxed as an S corporation.
Are there any ongoing taxes or fees that a limited liability partnership in Indiana is required to pay?
Yes, there are some ongoing taxes and fees, such as an annual fee paid to the Indiana Secretary of State.
How long does it take to complete the registration process for a limited liability partnership in Indiana?
The time it takes to complete the registration process for a limited liability partnership in Indiana varies, depending on the workload of the Secretary of State. It can take anywhere from a few weeks to a few months.
Can I use a home address as the office address for my limited liability partnership in Indiana?
Yes, you can use a home address as the office address for your limited liability partnership in Indiana.
Is there a publishing requirement for limited liability partnerships in Indiana?
No, there is no publishing requirement for limited liability partnerships in Indiana, unlike some other states.
What type of liability protection does a limited liability partnership in Indiana offer?
A limited liability partnership in Indiana offers protection to the partners from the business’s debts and liabilities, similar to other limited liability business structures.
What is a business entity report, and how often is it required for limited liability partnerships in Indiana?
A business entity report is an annual filing that provides the current information about the business, such as the registered agent and principal addresses. Limited liability partnerships in Indiana are required to file a business entity report annually.
Can a limited liability partnership in Indiana be converted into a different business structure?
Yes, a limited liability partnership in Indiana can be converted into a different business structure, such as an LLC or a corporation.
What happens if a partner leaves a limited liability partnership in Indiana?
If a partner leaves a limited liability partnership in Indiana, the remaining partners may need to dissolve and reform the business.
Can a limited liability partnership in Indiana own property and enter into contracts?
Yes, a limited liability partnership in Indiana can own property and enter into contracts on behalf of the business.
Do all partners in a limited liability partnership in Indiana have limited liability protection?
Yes, all partners in a limited liability partnership in Indiana have limited liability protection.
Can a limited liability partnership in Indiana have both domestic and foreign partners?
Yes, a limited liability partnership in Indiana can have both domestic and foreign partners.
Is there a fee to dissolve a limited liability partnership in Indiana?
Yes, there is a fee to dissolve a limited liability partnership in Indiana.
Do I need to file a specific form to dissolve a limited liability partnership in Indiana?
Yes, you will need to file a Dissolution of a Limited Partnership form with the Indiana Secretary of State to dissolve a limited liability partnership in Indiana.
Can a limited liability partnership in Indiana have a DBA (doing business as) name?
Yes, a limited liability partnership in Indiana can have a DBA (doing business as) name.
Can a limited liability partnership in Indiana be managed by one partner, or does it require all partners to manage the business?
Limited liability partnerships in Indiana have more flexibility in management than other types of partnerships and allow for some partners to take a more active managing role, although this may differ depending on what is outlined in the partnership agreement.
Does a limited liability partnership in Indiana require by-laws?
No, limited liability partnerships in Indiana do not require by-laws.
Do limited liability partnerships in Indiana need to have an operating agreement?
It is not required that limited liability partnerships in Indiana have a formal operating agreement. However, it is a recommended piece of documentation to outline the roles, responsibilities, and processes involved with managing the partnership.
Are there any special requirements or licenses necessary for limited liability partnerships in Indiana, depending on industry or location?
Special requirements or licenses may apply depending on the industry or location of the limited liability partnership, but additional measures will need to be researched in each individual circumstance.
Do limited liability partnerships in Indiana need to register in every state they do business in?
No, limited liability partnerships in Indiana do not need to register in every state they do business in. However, they must obey the rules and requirements in each state they do business according to that state’s law.
What is a limited liability partnership (LLP) in Indiana?
A limited liability partnership (LLP) in Indiana is a type of business entity in which the partners’ personal assets are protected from the debts and liabilities of the partnership.
How many partners can an LLP have in Indiana?
In Indiana, an LLP can have as few as two partners or as many as required.
How is an LLP taxed in Indiana?
An LLP in Indiana is not taxed at the entity level. Instead, profits and losses are allocated to the partners, who report them on their individual tax returns.
Do I need to register an LLP in Indiana?
Yes, you need to register an LLP in Indiana with the Secretary of State’s office.
How do I register an LLP in Indiana?
To register an LLP in Indiana, you need to file a Certificate of Limited Liability Partnership with the Secretary of State’s office.
How much does it cost to register an LLP in Indiana?
The fee to register an LLP in Indiana is $90.
Can an LLP in Indiana have a single member?
An LLP in Indiana must have at least two partners.
Does Indiana require LLPs to have a written partnership agreement?
No, Indiana does not require LLPs to have a written partnership agreement, but it’s highly recommended to have one.
Can an LLP convert to another business entity in Indiana?
Yes, an LLP can convert to another business entity in Indiana.
Does Indiana require LLPs to have a registered agent?
Yes, an LLP in Indiana must have a registered agent with a physical address in the state.
Can an out-of-state company form an LLP in Indiana?
Yes, an out-of-state company can form an LLP in Indiana.
Does Indiana require LLPs to file annual reports?
Yes, LLPs in Indiana are required to file annual reports with the Secretary of State’s office.
What information is required in the annual report for an LLP in Indiana?
The annual report for an LLP in Indiana requires information about the names and addresses of all partners.
Are LLPs required to obtain business licenses in Indiana?
Possibly, depending on the type of business activity involved. You should consult with the appropriate state or local agencies.
Is there a maintenance fee for LLPs in Indiana?
No, there is no maintenance fee to maintain an LLP in Indiana.
Can an LLP designate a tax-exempt partner in Indiana?
Yes, an LLP in Indiana can designate a tax-exempt partner.
Are Indiana LLPs required to have insurance?
No, Indiana does not require LLPs to have liability insurance, but it’s strongly recommended.
Can an LLP in Indiana be dissolved voluntarily?
Yes, an LLP in Indiana can dissolve voluntarily if all partners agree.
What happens in the event of the death of an LLP partner in Indiana?
In Indiana, the LLP will continue unless the partnership agreement specifies otherwise.
Can an LLP in Indiana be sued?
Yes, an LLP in Indiana can be sued, but the plaintiffs can only collect from the assets of the partnership, not the personal assets of the partners.
Is there a minimum contribution requirement for LLPs in Indiana?
No, there is no minimum contribution requirement for LLPs in Indiana.
Can foreign nationals be partners in an LLP in Indiana?
Yes, foreign nationals can be partners in an LLP in Indiana.
Can non-US residents form an LLP in Indiana?
No, non-US residents cannot form an LLP in Indiana. At least one partner must have a United States address for service of process and a United States tax ID number.
Does Indiana allow LLPs to establish a series structure?
No, Indiana does not allow LLPs to establish a series structure.
Can an LLP in Indiana have unlimited liability?
No, an LLP in Indiana provides limited liability protection to its partners.
Are there any naming restrictions for LLPs in Indiana?
Yes, the name of an LLP in Indiana must include either “limited liability partnership” or “LLP” and must be distinguishable from the names of other registered business entities in the state.
How long does it take to form an LLP in Indiana?
It typically takes about 10-12 business days to form an LLP in Indiana.
Can an Indiana LLP have a location outside Indiana or the USA?
Yes, an LLP in Indiana can have a location outside of Indiana or the United States, but it must have a designated agent with a physical address in Indiana.

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Conclusion

Starting an LLP in Indiana may seem daunting, but you can successfully establish and run your business with thorough research, planning, and compliance with legal requirements. Feel free to seek professional assistance from legal or financial advisors when needed to ensure your Limited Liability Partnership’s smooth operation and growth in Indiana.

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