Massachusetts LLP Lawyer
A limited liability partnership (LLP) lets partners run a business together as a partnership while protecting each partner from personal liability for the partnership's debts and for the mistakes of other partners. LLPs are especially common among professional firms. Botelho Law Group helps partners across Massachusetts register LLPs, prepare partnership agreements, keep their registrations current and resolve disputes between partners. Free consultation in English, Portuguese or Spanish.
What an LLP is
An LLP is a general partnership that has registered with the state for limited liability protection. In Massachusetts, LLPs are governed by the Uniform Partnership Act, Chapter 108A of the General Laws. The partnership keeps the flexibility and tax treatment of a partnership, but the partners gain protection that ordinary general partners do not have.
Why the “limited liability” matters
In an ordinary general partnership, every partner can be personally liable for all of the partnership’s debts, including debts caused by another partner’s mistake. A single malpractice claim against one partner can put every partner’s home and savings at risk.
In a registered LLP:
Partners are generally protected
Partners are generally protected from personal liability for the partnership’s debts and obligations, including claims arising from the negligence or misconduct of other partners.
Each partner remains responsible for their own conduct
Each partner remains responsible for their own conduct, and may also be responsible for people working under their direct supervision and control.
The partnership’s own assets
The partnership’s own assets remain available to pay its obligations.
The scope of protection depends on the statute, the facts and any personal guarantees the partners sign.
Who uses LLPs
LLPs are particularly well suited to professionals who practice together, such as:
- Accountants
- Architects and engineers
- Other licensed professionals, where their licensing rules permit
Many professionals choose an LLP because they want protection from claims arising from their partners’ work, while keeping a partnership structure for management and taxes. Some professions have their own rules about which entities they may use and what insurance they must carry, so check with the licensing board.
Comparing LLPs with other entities
| Entity | Liability protection | Taxes (default) | Management |
|---|---|---|---|
| General partnership | None; partners liable for each other | Pass-through | All partners |
| Limited partnership (LP) | Limited partners protected; general partner fully liable | Pass-through | General partner |
| Limited liability partnership (LLP) | Partners protected from partnership obligations, as the law provides | Pass-through | All partners, as agreed |
| Limited liability company (LLC) | Members protected | Pass-through, or corporate by election | Members or managers |
| Professional corporation | Shareholders protected from others’ professional mistakes | Corporate, or S corporation by election | Directors and officers |
Choosing between an LLP and an LLC
For many professional firms, the choice comes down to an LLP or an LLC. Both offer pass-through taxation and liability protection. An LLP may suit an existing partnership that wants to keep its familiar structure and partnership agreement. An LLC offers more flexibility in management and can elect corporate tax treatment. Licensing rules sometimes decide the question, because some professions may use only certain entity types. We review your profession’s rules, your tax goals and how your partners want to work together before recommending a structure.
Registering an LLP in Massachusetts
- Form the partnership. Two or more partners agree to carry on a business together, ideally in a written partnership agreement.
- Choose a name that includes “Limited Liability Partnership,” “L.L.P.” or “LLP,” as the law requires.
- File a registration with the Secretary of the Commonwealth, including the partnership’s name, address, business, resident agent and other required information.
- Appoint a resident agent in Massachusetts.
- Obtain an EIN and register with the Massachusetts Department of Revenue.
- Meet any professional requirements, such as insurance or registration with a licensing board.
An existing general partnership can register as an LLP, but the registration generally protects partners only for obligations that arise after it takes effect.
The partnership agreement
A written partnership agreement is essential. Without one, Massachusetts default rules apply, and they may treat partners equally in ways the partners did not intend. A good partnership agreement covers:
- Capital contributions and each partner’s share of profits and losses
- Draws, salaries and distributions
- Management, voting and decisions that require unanimous consent
- Admission of new partners
- Withdrawal, retirement, disability and death of a partner
- How a departing partner’s interest is valued and paid
- Non-solicitation of clients and employees
- Malpractice insurance and indemnification between partners
- Dispute resolution and dissolution
Insurance and professional responsibility
The LLP form protects partners from each other’s mistakes, but it does not protect the firm itself. Clients harmed by a professional error can still pursue the partnership’s assets and the professional who made the mistake. That is why professional liability insurance remains essential. Some licensing boards and professional rules require firms that use limited liability forms to carry specific coverage. Partners should review their policy limits, deductibles and coverage for former partners and employees, and make sure the partnership agreement says who pays the deductible when a claim arises.
Bringing in new partners
Admitting a new partner is a major decision. The partnership agreement should set out how new partners are approved, what they must contribute, how their share of profits is set, and whether they become full equity partners right away or after a period. New partners should receive a copy of the agreement and sign on to it. Partners should also consider whether the new partner brings existing clients, liabilities or non-competition obligations from a prior firm.
Annual requirements
A Massachusetts LLP must keep its registration current by filing annual reports with the Secretary of the Commonwealth. An LLP that lets its registration lapse risks losing its liability protection for obligations that arise during the lapse. Partners should calendar the filing date and keep the resident agent information current.
Taxes
An LLP is generally taxed as a partnership. It files an informational partnership return, and each partner reports their share of income or loss on their own return. Partners in professional firms should work with an accountant to plan for self-employment taxes, estimated payments and retirement plans.
Protecting the liability shield
To keep the protection an LLP provides:
- Keep the registration and annual reports current
- Use the full LLP name on letterhead, contracts, signs and websites
- Keep partnership and personal finances separate
- Sign contracts in the partnership’s name, not personally
- Maintain any insurance required for your profession
- Be careful about personal guarantees for leases and loans
When a partner leaves
Partner departures are among the most common sources of conflict. Questions include how the departing partner’s share is valued, how it is paid, who keeps which clients and files, and whether the departing partner can compete or solicit clients. Professional rules may give clients the right to choose which professional to follow. A clear partnership agreement, written before anyone leaves, makes these transitions smoother.
Retirement and succession
Many professional firms are built around a few founding partners. Planning for their retirement protects both the retiring partners and those who remain. A succession plan can set a retirement age or notice period, a schedule for transferring client relationships, how the retiring partner’s interest will be paid out over time, and whether the retiring partner can continue to work in a limited role. Funding buyouts with insurance or a reserve can prevent a single departure from straining the firm’s cash flow.
Partnership interests and estate planning
A partner’s interest in an LLP is valuable property. If a partner dies, the partnership agreement usually controls what happens: often a buyout paid to the partner’s estate rather than a transfer to heirs. Partners should coordinate the agreement with their own will or trust, life insurance and beneficiary designations, so their families receive the value of the interest without a dispute.
Partnership disputes
Disputes between partners can involve compensation, management, expenses, access to records, breaches of duty and the value of a partner’s interest. Partners owe each other duties of loyalty and good faith. Many disputes can be resolved through negotiation or mediation. When they cannot, we represent partners and partnerships in the Superior Court.
Converting or dissolving an LLP
An LLP may later convert to an LLC or a professional corporation, merge with another firm, or wind up its business. Each step requires partner approvals and state filings. When a partnership dissolves, it should wind up its affairs, pay or provide for debts, distribute remaining assets according to the agreement and file the required documents with the state.
Clients who speak Portuguese or Spanish
Many professionals and business owners we help speak Portuguese or Spanish. Our team includes fluent Portuguese-speaking and Spanish-speaking staff who work with Attorney Botelho. They help you understand your registration, partnership agreement and annual requirements in your language.
What to bring to your consultation
- The names of the partners and the business or profession
- Any existing partnership agreement
- Information about licensing and insurance requirements
- Your accountant’s contact information
- Questions about liability, taxes or partner departures
How we help
Free consultation
We review your goals and whether an LLP fits, in English, Portuguese or Spanish, and explain the cost.
Registration
We prepare and file the LLP registration.
Partnership agreements
We draft agreements that protect each partner.
Ongoing support
We help with annual filings, new partners and departures.
Disputes
We represent partners and partnerships in disagreements and litigation.
Related pages
Frequently asked questions
What is the difference between an LLP and an LLC?
Both protect owners from liability and are taxed as pass-through entities by default. An LLP is a registered partnership, often used by professional firms. An LLC is more flexible and is used by many types of businesses.
Am I liable for my partner’s malpractice in an LLP?
Generally no. An LLP protects partners from claims arising from other partners’ mistakes. You remain responsible for your own conduct, and possibly for people you directly supervise.
How many partners does an LLP need?
At least two. A partnership requires two or more people carrying on a business together.
Can my existing partnership become an LLP?
Yes. A general partnership can register as an LLP. The protection generally applies to obligations that arise after registration.
Does an LLP need a partnership agreement?
It is not filed with the state, but a written agreement is strongly recommended.
What happens if we miss an annual report?
The registration may lapse, which can put the partners’ liability protection at risk. File on time and keep records current.
Does an LLP protect the firm from malpractice claims?
No. The firm itself and the professional who made the mistake can still be liable. The LLP protects the other partners personally. Professional liability insurance is still essential.
Do you handle LLP matters anywhere in Massachusetts?
Yes. Botelho Law Group represents professionals and business owners across Massachusetts.
Can you help in Portuguese or Spanish?
Yes. Our team includes fluent Portuguese-speaking and Spanish-speaking staff who work with Attorney Botelho.
Talk with us about an LLP
Tell us about your partners, your profession and your goals. We will explain whether an LLP fits and the next steps.