Corporate Requirements & Compliance for a US LP

The laws governing the limited partnership are largely identical, or at least very similar, across all US states. But as always, the devil is in the details.

In this section we look at the requirements of each state. At the end you will also find a summary table giving you an overview of the LP in each US state.

1Formation time

How long it takes to form an LP varies from state to state. Anywhere from 2 days to two weeks is normal. Because government offices can always run into delays, we run the process with active follow-up: when needed, we call the relevant offices so your filing gets processed as quickly as possible.

2Formation fees

Formation fees also vary widely between states. Fees between $70 and $1,000 are typical.

3Public disclosure in the state register

In some states, the personal details of the LP's manager are published in the state business register and are open to public view. Other states publish no information at all. The partners' details are not recorded by the authorities. You'll find an overview by state in the table at the end of this page.

4Tax return

The LPs we form are trading partnerships. Their profit is taxed in the US as income of the partners. The partnership itself therefore pays no tax of its own, but it files an annual information return with the IRS (Form 1065, the partnership tax return).

The limited partnership is tax-transparent. Taxation happens at the level of the partners, and the US tax burden is around 25-35 %, depending on the size of the profit and the industry. All partners must file a US tax return.

5Partnership Agreement

The rules on the partnership agreement vary across the US states, and they also differ by type of entity. For a limited partnership, some states may require a partnership agreement, either written or oral, but as a general rule it is not mandatory.

The partnership agreement sets out the financial and administrative rights and duties of each partner in a limited partnership, GP or LLP. It isn't mandatory, but it keeps the business running smoothly and protects each partner in a dispute. That's why we advise every client to put a written partnership agreement in place.

6Annual report

The rules on annual reports differ from state to state depending on the type of entity. Some states require one for the LP, while many, such as Missouri, do not. The annual report should not be confused with a tax return. The annual report is simply a filing with the state business register confirming the company details on record (such as registered office, management and business purpose).

Some states require a report every two years instead of every year. Our service covers the annual fee for preparing and filing the annual report as well as the state fees.

7Annual fees

The annual fees for a limited partnership also vary across the US states. Some states only charge a fee when you file the annual report. Others levy an additional flat tax (franchise tax).

8Overview table

The table below summarizes each state's legal requirements on the points covered here:

For more on company formation, see our overview page Formation. The matching requirements for the other entity types are covered in Compliance for the US LLC and Compliance for the US C Corporation; for the tax side, see Taxation of the US LP.

In short

• Formation time and fees for an LP vary by state: two days to two weeks and fees between $70 and $1,000 are typical.
• The LP is tax-transparent: it pays no tax of its own but files Form 1065 with the IRS every year, and all partners file a US tax return.
• The partners' US tax burden is around 25 to 35 %, depending on profit and industry.
• A partnership agreement is generally not required. We still recommend a written agreement.
• Some states require an annual report, many don't; others levy an annual tax instead.

How we help you

• Form a Limited PartnershipThe US LP for structures with a general partner and limited partners.
• LLC and LP Tax ReturnForm 1065 and K-1 for your LLC or LP.
• Apply for an EINYour company's US tax ID, applied for by us.
• US Company FormationLLC, Inc or LP in Delaware, Florida, California, New York, Texas or Wyoming.
• Company formation consultationEntity type, state and tax consequences, before you commit.