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Wednesday, August 3, 2011

Registering the property under the LLP

Assuming the offer and closing was done under your own names, how does the property get moved under the LLP?

Well, there is a form. There would be. :-) It's called a "Quit Claim" deed. Samples can probably be found on the Maricopa County Recorder's site.

The Quit Claim Deed needs to be sent to the Maricopa County Recorder's office, along with a fee of $10. Maricopa County Recorder:j 111 S. Third Ave, Phoenix, Az, 85003. (602)506-3535.

This time we will submit the Quit Claim Deed ourselves. In the past we have had someone (Title Company or a local Paralegal) do it for us. I assume we will need to send two notarized copies of the Quit Claim Deed along with a self addressed, self stamped envelope.

Here is a link to a sample Quit Claim deed...the one that we used to transfer our first property from the LLC (after we figured out that approach had some risk) to the LLP. http://recorder.maricopa.gov/recdocdata/GetRecDataDetail.aspx?rec=20091131451&suf=

For this purpose the Quit Claim deed would be from our individual names to the LLP, instead of from an LLC to the LLP.

Update November 5: Two things: (1) The Quit Claim form needs to be notarized. We were going to be in the US in late August anyway, so we took the form with us and had it notarized at a US bank. It was convenient and inexpensive ($6) and avoided the risk of being rejected because of a lack of recognition of a Canadian "Commissioner of Oaths" or a Canadian notary. (2) Sending two notarized copies of the form to the the Recorder was a mistake: They sent it back saying "you sent two forms and included only one fee". Sigh. So I removed one copy of the form and sent it back. They recorded it and sent me back the form. My mistake. I guess they don't need to keep a copy. Anyway, the do-it-yourself Quit Claim approach was successful. It took a couple of weeks to be viewable on the web, but I can see the property is now registered to the LLP.

3 comments:

  1. Do all members of the LLP need to be individuals or can one or more be a corporation or other entity?

    Also can one partner be considered a General partner handling the day-to-day of the property?

    ReplyDelete
  2. I have only used LLPs with individuals as partners. However I believe another LLP, LLC, or corporation could be one of the partners. One reader suggested setting up an LLP with 99% interest to an individual, and 1% to a corporation. Presumably that would get around the constraint of an LLP requiring at least 2 partners. But the reason he suggested it was to contain liability risk to the 1% controlled by the corporation. I'm not sure how the liability aspect of that would work.

    Yes, in practice one partner can be the individual who manages the partnership on a day to day basis. I don't believe there is anything special required to make that work. Roles and responsibilities could be described in the partnership agreement, and for example the LLP bank account could be set up with limitations in signing authority. Taking that to the next level, and now I am on thin ice with respect to knowledge, I believe that if you then want to limit personal liability for those not in control, that is when you use an LLLP (three Ls). Someone who knows more can straighten me out on that.

    ReplyDelete
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