Limited Partnership Complexity : Moderate to High
A limited partnership must meet specific statutory requirements at organization under Minn. Stat. Chapter 321. The offering of ownership interests is subject to securities laws. Accordingly, limited partnerships are often more complex and expensive to organize than general partnerships. Professional legal and financial advice is essential for forming a limited partnership. Limited Liability Partnership (LLP) and Limited Liability Limited Partnership (LLLP) Complexity: Moderate An existing general partnership may elect LLP status by filing a limited liability partnership registration with the Secretary of State. Such registration is effective for an indefinite period. LLLPs are also permitted. Key points: • Limited liability status has an indefinite term • The Secretary of State will revoke LLP or LLLP status if the required annual registration is not filed • LLPs and LLLPs generally follow basic partnership or limited partnership law with specific statutory exceptions Anyone interested in forming an LLP or LLLP should seek legal counsel.
Corporation Complexity: High
The corporation is a formal and complex form of organization, and accordingly can be expensive to organize. Procedures and criteria for forming a corporation and its governance are established by Minn. Stat. Chapter 302A. Critical warning: Failure to follow statutory formalities can result in loss of corporate status and imposition of personal liability on incorporators or shareholders. Additional complexity factors : • S corporations require filing an election with the IRS in a timely fashion • Care must be taken when transferring shares to avoid inadvertently losing S corporation status • Greater use of professional advisors increases costs • Filing fees are higher for corporations • Tax compliance and government reporting requirements add ongoing costs
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