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

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Start a Limited Liability Partnership in Oklahoma

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 Oklahoma. LLP structure is ideal for attorneys, accountants, and consultants. If you’re considering starting a Limited Liability Partnership in Oklahoma, 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 Oklahoma LLP, all the steps in this article must guide you.

Steps in Starting a Limited Liability Partnership in Oklahoma

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 Oklahoma, 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 Oklahoma 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 Oklahoma

To form a limited liability partnership in Oklahoma, 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 Oklahoma, 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 Oklahoma business registry. Ensure that your chosen name follows Oklahoma 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 Oklahoma Secretary of State if desired.

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

  • 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 Oklahoma Secretary of State business name database and Oklahoma Business Name Search. If the name is available, you may choose to reserve it for a specific period of 60 days by filing a name reservation application and paying the online name reservation fee of $25 and mail name reservation fee of $25. 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 $25. In addition, the DBA’s validity in Oklahoma is Indefinite, which you can file in the Oklahoma Secretary of State.

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

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Step 3: Designate a Registered Agent

In Oklahoma, 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 Oklahoma Registered Agent Services to serve as your LLP’s Registered Agent, ensuring that they meet Oklahoma 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 Oklahoma 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 Oklahoma 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 Oklahoma 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 Oklahoma. The default laws in Oklahoma might not be appropriate for your requirements.

Step 6: Get an EIN

Your LLP must obtain Oklahoma 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 Oklahoma 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 Oklahoma.

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 Oklahoma LLP. Additionally, obtain the necessary Oklahoma 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 Oklahoma 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 Annual Reports with the Oklahoma Secretary of State (if required), maintain accurate financial and operational records, and file and pay required taxes at the federal, Oklahoma, and local levels.

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Advantages of Forming a Limited Liability Partnership in Oklahoma

While the specific advantages of forming an LLP in Oklahoma 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 Oklahoma:

  • 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 Oklahoma.
  • 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 Oklahoma 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 Oklahoma.

Cost of Forming an LLP in Oklahoma

The cost of forming an LLP in Oklahoma 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 Oklahoma 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 Oklahoma 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?
A limited liability partnership is a type of business structure where the partners have limited personal liability for the company’s debt and legal obligations.
Can I form a limited liability partnership in Oklahoma?
Yes, you can form a limited liability partnership in Oklahoma.
What is the process for forming a limited liability partnership in Oklahoma?
To form a limited liability partnership in Oklahoma, you must file a Certificate of Limited Liability Partnership with the Oklahoma Secretary of State.
Can anyone be a partner in a limited liability partnership in Oklahoma?
Yes, as long as they meet the requirements set forth in Oklahoma state law.
Do I need a lawyer to form an LLP in Oklahoma?
No, you do not always need a lawyer to form a limited liability partnership in Oklahoma, but it is recommended to seek legal advice.
What are the advantages of forming a limited liability partnership in Oklahoma?
The advantages of forming an LLP in Oklahoma include limited liability protection for partners, pass-through taxation, and the ability to participate in management and control of the business.
What are the disadvantages of forming a limited liability partnership in Oklahoma?
The disadvantages of forming an LLP in Oklahoma include potential restrictions on transferring partnership interests and the requirement to follow certain formalities.
How many partners can a limited liability partnership have in Oklahoma?
An LLP in Oklahoma can have as few as two partners and no maximum limit.
Is there a minimum amount of capital required to start an LLP in Oklahoma?
No, there is no minimum amount of capital required to start an LLP in Oklahoma.
What type of business can be a limited liability partnership in Oklahoma?
Any type of business, including professionals such as lawyers and accountants, can form an LLP in Oklahoma.
Do all partners in an LLP in Oklahoma need to be actively involved in the business?
No, not all partners in an LLP in Oklahoma need to be actively involved in the business.
Does Oklahoma state law require a written partnership agreement for LLPs?
Yes, Oklahoma state law requires a written partnership agreement for LLPs.
Can an LLP in Oklahoma be taxed as an S-corporation?
No, an LLP cannot be taxed as an S-corporation in Oklahoma.
What are the annual requirements for an LLP in Oklahoma?
An LLP in Oklahoma must file an annual report with the Oklahoma Secretary of State.
Does Oklahoma require publication of information about an LLP?
No, Oklahoma does not require publication of information about an LLP.
Can an LLP in Oklahoma be converted to a different entity type?
Yes, an LLP in Oklahoma can be converted to a different entity type.
Is professional liability insurance required for LLPs in Oklahoma?
Professional liability insurance is not required for LLPs in Oklahoma.
Can out-of-state partners form an LLP in Oklahoma?
Yes, out-of-state partners can form an LLP in Oklahoma.
Can an LLC be converted to an LLP in Oklahoma?
Yes, an LLC can be converted to an LLP in Oklahoma.
Can an LLP elect to be taxed as a corporation in Oklahoma?
Yes, an LLP can elect to be taxed as a corporation in Oklahoma.
Are LLPs required to register fictitious business names in Oklahoma?
Yes, LLPs are required to register fictitious business names in Oklahoma.
Can an LLP have a non-partner as its registered agent in Oklahoma?
Yes, an LLP can have a non-partner as its registered agent in Oklahoma.
Can an LLP in Oklahoma have a single partner?
No, an LLP in Oklahoma must have at least two partners.
Does Oklahoma law require any filings beyond formation documents for LLPs?
No, Oklahoma law does not require any filings beyond formation documents for LLPs.
Can partners in an LLP have different ownership percentages in Oklahoma?
Yes, partners in an LLP can have different ownership percentages in Oklahoma.
Can an LLP in Oklahoma have foreign partners?
Yes, an LLP in Oklahoma can have foreign partners.
Can partners in an LLP be added or removed during the year in Oklahoma?
Yes, partners in an LLP can be added or removed during the year in Oklahoma.
Is Oklahoma a good state to form a limited liability partnership?
Oklahoma can be a good state to form an LLP for those seeking limited liability protection and pass-through taxation.
What is a limited liability partnership in Oklahoma?
A limited liability partnership in Oklahoma is a partnership that enjoys the flexibility of a partnership, but offers some of the liability protections of a corporation.
What is the process of starting a limited liability partnership in Oklahoma?
The process for starting a limited liability partnership in Oklahoma involves filing a certificate of partnership with the Oklahoma Secretary of State.
Who can form a limited liability partnership in Oklahoma?
Any two or more persons, including individuals, partnerships, corporations, and other LLCs can form a limited liability partnership in Oklahoma.
Do limited liability partnerships in Oklahoma have to file an annual report?
Yes, limited liability partnerships in Oklahoma are required to file an annual report with the Oklahoma Secretary of State.
What is the cost of filing a certificate of partnership in Oklahoma?
The cost of filing a certificate of partnership in Oklahoma is $25 as of 2021.
Do limited liability partnerships in Oklahoma have to pay taxes?
Limited liability partnerships in Oklahoma do not pay taxes on the business level. Rather, the income and losses are passed through to the partners to report on their personal income tax returns.
How is a limited liability partnership in Oklahoma taxed?
A limited liability partnership in Oklahoma is not taxed as a separate entity for state tax purposes. The income and losses are passed through to the partners to report on their personal income tax returns.
Can a limited liability partnership in Oklahoma convert to another entity type?
Yes, Oklahoma law allows a limited liability partnership to convert to another entity type with the approval of the partners and compliance with Oklahoma’s conversion laws.
What is required to maintain a limited liability partnership in Oklahoma?
Limited liability partnerships in Oklahoma are required to file an annual report and maintain registration with the Oklahoma Secretary of State. Additionally, they must maintain any necessary business licenses and comply with all applicable state laws and regulations.
How long does it take to form a limited liability partnership in Oklahoma?
Once the certificate of partnership is filed with the Oklahoma Secretary of State, the limited liability partnership is officially formed. The filing process typically takes expedited processing for $25 or regular processing within 2 to 7 business days, depending on the option chosen.
Can non-residents run a limited liability partnership in Oklahoma?
Yes, non-residents can operate a limited liability partnership in Oklahoma , as there are no residency requirements to form or operate an LLP in the state.
Can a limited liability partnership have a DBA (doing business as) name in Oklahoma?
Yes, limited liability partnerships can operate under a DBA name in Oklahoma, which is known as an assumed business name, upon being registered by the Secretary of State.
How many people must be involved in an LLP in Oklahoma?
In Oklahoma, a limited liability partnership must have at least two general partners.
Can a limited liability partnership in Oklahoma hire employees?
Yes, limited liability partnerships in Oklahoma can hire employees.
Is a registered agent required for an LLP in Oklahoma?
Yes, limited liability partnerships in Oklahoma need to have a registered agent provided on the certificate of partnership.
Are foreign LLPs allowed to operate in Oklahoma?
Yes, foreign LLPs can operate in Oklahoma so long as they meet the proper filing requirements for out-of-state entities.
When is a limited liability partnership in Oklahoma considered dissolved?
A limited liability partnership in Oklahoma is considered dissolved upon the partnership’s dissolution to its originally provided agreement of concern.
Is there a lot of paperwork required to start an LLP in Oklahoma?
The required paperwork for starting a limited liability partnership in Oklahoma is fairly minimal, with only requiring you to file the certificate of partnership with the Secretary of State.
Can a limited liability partnership in Oklahoma be an S-Corp for tax purposes?
No, S-Corp status is for corporations, and not available for limited liability partnerships in Oklahoma.
Can a limited liability partnership in Oklahoma be a non-profit organization?
No, non-profit organizations require a different entity structure and are legally separate from limited liability partnerships in Oklahoma However, the LLP business type can elect favorable tax treatment under certain circumstances permitted by the IRS, albeit entities operated strictly for charitable or religious purposes have their exact distinction.
How is the liability of individual partners handled in a limited liability partnership in Oklahoma?
Individual partners in an LLP aren’t liable for the partnership actions thus partners carry its own share in the partnership.
What prevention should the partners performing business have to be against lawsuits in Oklahoma?
Partners may consider partnership agreement policies like winding-down conditions, legal hire agreements and obtaining adequate compliance surrounding records and making accurate statements or aware disclosures can reduce the prevent interest disputes and lawsuits.
Can a partner in an LLP owe a fiduciary duty to other partners in Oklahoma?
Limited Liability partnerships are subject to statutory litigation when determining Partner’s duty of fidelity thus taking up and extending this due care to refer partnership formation lawyers, CPAs, and enlisted market observers could further mitigate chances of disputes and breach- by contemplating specifics and having the same acknowledged among them.
What types of documents do partners of an LLP in Oklahoma have to maintain?
Partners in an LLP will have personal liability of ensuring that partnership dealings are transparent and transactions of accounts- kept up-to-date facilitating the same records can inform of regulatory compliance, and have them readily accessible in situations of statutory or personal conflict.
Can limited liability partnerships conduct operations outside of the Oklahoma State?
Yes, limited liability partnerships can carry out business activities and operations across multiple States besides Oklahoma with adequate measures doing business statutes compliance requirements in each state being adhered.
What entities are least risky than LLPs in Oklahoma?
Forming and existing other legal entity types in Oklahoma could be less risk-prone than LLPs like incorporating as LLC with same or even more robust asset management mechanisms and statutory support.
Is using partnerships for becoming Tax FO (federally qualified opportunities, tax-free-interest schemes) an Economically safe option?
Forming general partnerships to embark on economic opportunities as may be advised or suggested by financial planners is untraditional, and isn’t always risk-free – seeking expert opinion and support before starting such transactions but could beef up expertise.
What type of certification is required from the partners to form a registered charity LLP under Oklahoma laws?
Registering a Charity LLP exists as a branch of the Oklahoma non-profit organizations law in relevance to Not-for-Profit corporations this, along with several other including obtaining the endorsement from authorities could give provide statutory protection to start a PPP activity with social services and obligations.

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Conclusion

Starting an LLP in Oklahoma 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 Oklahoma.

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