Partnership Agreement
(PA LLP)

Summary

This template Limited Liability Partnership Agreement can be used to establish a limited liability partnership in Pennsylvania. This template includes practical guidance, drafting notes, and alternate clauses. This template is tailored to reflect recent changes to Pennsylvania law as a result of (1) amendments to Chapter 82 of Title 15 of the Pennsylvania Consolidated Statutes and (2) the adoption of the Pennsylvania Uniform Limited Partnership Act of 2016 and the Pennsylvania Uniform Partnership Act of 2016, which govern all Pennsylvania limited partnerships and general partnerships, respectively, effective April 1, 2017. Under Pennsylvania law, parties have broad discretion with respect to the terms of a general partnership agreement, thus many of the terms set forth herein may be modified according to the client's needs. On January 1, 2018, new Internal Revenue Code rules took effect governing IRS tax audits of partnerships and limited liability companies (and other entities) taxed as partnerships. These rules, passed in the Bipartisan Budget Act of 2015 (BBA), replace the former Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) and bring significant changes to the assessment and collection of tax at the partnership level, detailed rules for calculating imputed underpayment, the introduction of " a "partnership representative" that differs in certain critical ways from the "tax matters partner" under TEFRA, requirements to elect out of the new rules, and an election to push out imputed underpayments to the partners in an affected year. This template of partnership agreement for a Pennsylvania LLP includes provisions that respond to the BBA's changes, in particular by requiring, to the extent possible, the LLP both to elect out of the new audit rules (when eligible) and to push out the imputed underpayments to the partners of the year that was audited. For additional information, see Partnership Tax Audit Rules.