Limited Liability Limited Partnerships (LLLPs)

Definition

A limited liability limited partnership is a state-law limited partnership that has elected to shield its general partners, as well as its limited partners, from personal liability for the partnership's obligations. No federal law creates it; for federal tax purposes it is classified like any limited partnership, taxed as a partnership by default,^[3] so the entity pays no income tax and each partner is taxed on a share of its income.^[2]

Federal law

Formed under state law. No Act of Congress creates it; the federal laws below apply to it as described.

1. Internal Revenue Code of 1954, Pub. L. 83-591, ch. 736, § 7701, 68A Stat. 911. Defines "partnership" for federal tax purposes (26 U.S.C. § 7701(a)(2)); does not create LLLPs. Official text: govinfo.gov, U.S. Government Publishing Office.
2. Internal Revenue Code of 1954, Pub. L. 83-591, ch. 736, § 701, 68A Stat. 3, 239. Provides that a partnership is not itself subject to income tax; partners are taxed individually (26 U.S.C. § 701). Official text: govinfo.gov, U.S. Government Publishing Office.

Federal regulations

Rules issued by federal agencies under the laws above.

3. Classification of certain business entities, 26 CFR 301.7701-3 (Internal Revenue Service (Department of the Treasury)). Default classification of a domestic eligible entity with two or more members as a partnership, with an election to be taxed as a corporation. Official text: govinfo.gov, U.S. Government Publishing Office.