A significant question pending under the recently effective Corporate Transparency Act (“CTA”) is whether a limited liability partnership (“LLP”) is a “reporting company” as defined in the CTA and the related “Reporting Regulations.” Classification as a reporting company has the effect of ab initio subjecting the firm to the beneficial ownership information reporting obligations of the CTA and the Reporting Regulations absent, on a firm-by-firm basis, an exemption from those burdens.
As detailed below, in considering the definition of a CTA reporting company with the law addressing how an LLP comes into being, it is clear that an LLP is not a reporting company.
This article begins with a review of the genesis of the LLP from the midst of the savings and loan crisis of the late 1980s and the subsequent progression of the form from bespoke supplements to state adoptions of the Uniform Partnership Act (1914) and the Uniform Partnership Act (1994), and then to the detailed provisions for LLPs set forth in the Revised Uniform Partnership Act (1997). We then turn to the CTA and the Reporting Regulations to review their respective definitions of what is a reporting company, including informal guidance from the Financial Crimes Enforcement Network (“FinCEN”) office of the Department of the Treasury as to the application of the regulatory definition. Turning then to the crux, we review why the LLP does not fall within the scope of either definition of what is a reporting company.
