Converting from an LLC, or limited liability company, to an LLP, or limited liability partnership, differs from state to state. While most states permit LLCs, some states do not authorize LLPs. Always check with your Secretary of State to learn if you can convert to an LLP, and identify the form or format required. Changing to an LLP can get a bit complicated at times. For example, if you now have a one-member LLC, you'll have to create a formal partnership agreement, naming all the partners, their ownership percentage, how profits will be divided and all other partnership management details.
Speak with the Secretary of State's office or investigate online to learn if your state permits LLPs to be formed. If it does, learn the specifics of the process, including all required documents -- like articles of organization -- and state forms that must be filed. If LLPs are legal, learn what type businesses are eligible for LLP formation. Many states restrict the business types that are allowed.
Read More: Which Is Better: an LLC or an LLP?
Pick a name for your LLP that is permitted by your state. You will not be allowed to duplicate the name of another LLP registered in your state. Even deceptively similar names are usually prohibited by your state regulations to avoid confusing or trading on the name and goodwill of another LLP.
File for and receive a federal EIN, or Employer Identification Number, from the IRS. While you have four choices to get your EIN -- online, telephone, fax, and mail -- the fastest way is to complete the online form, as you will receive your EIN immediately (see Resources).
Design and write a partnership agreement. While forming an LLC gives you some choices for structure, an LLP requires a partnership agreement that is the official structure document from which all other issues proceed. Keep in mind that some states only allow professionals to form LLPs. For example, some states restrict LLPs to accountants, medical doctors, architects, engineers and lawyers. All other businesses that want to have limited liability for owners must form LLCs.
Pay all registration fees required by your state to file for an LLP. Don't forget to apply for any required licenses you and your partners may be lacking. While all partners are probably licensed in professional LLPs, should any licenses not be up to date, or should one or more partners be new state residents, they may need to apply for permission to practice in your state.
Warnings
Understand that the limited liability offered by an LLP is somewhat different from that of an LLC. The LLP should protect all partners from having personal liability for the actions of another partner. This is a critical difference from an LLC and highly important to professional LLPs such as accountants, doctors and lawyers. Always check your state laws to understand the protection you receive. Learn if your state -- or country -- is one that requires an LLP to have a "general partner" with unlimited liability.
Tips
Consult an attorney or accountant if you are not sure if an LLC to LLP conversion is the best option for you. Learn the contents of the 1996 Uniform Partnership Act, as many states have regulations for LLPs that conform to this legislation.