There remains an unanswered question with regard to whether limited liability partnerships (LLPs) are required to report under the Corporate Transparency Act.

Legal scholars have argued that LLPs are not entities similar to a corporation or limited liability company since they are not “created by the filing of a document with the secretary of state or a similar office under the law of the State.” While an LLP is required to file with the secretary of state, it is an open question whether the filing creates a new entity or merely provides a type of status of an existing partnership.

Although there has been no guidance on the issue, the policy behind the Act is to provide law enforcement with beneficial ownership information to help preempt, discover, and punish misconduct occurring in business organizations. In light of this policy, the question is then whether Congress and Fin CEN intended reporting company status based on the concept of a legal entity or, instead, on the governmental recognition and regulation of an organization through a filing process that makes public a business firm and certain information about the firm.

It follows that, if the federal government desires to ensure that LLPs file reports under the Corporate Transparency Act, Congress needs to act to clarify the matter.

For the vast majority of LLPs providing the required information to the federal government should not be an issue and we recommend that they report under the Corporate Transparency Act. However, if your LLP has concerns about reporting or not reporting, discuss the matter with your business attorne

The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.