A partner in a RLLP is not individually liable for debts and obligations of the partnership arising from errors, omissions, negligence, incompetence, or malfeasance committed in the course of the partnership business (while the partnership is a RLLP) by another partner or a representative of the partnership not working under the protected partner's supervision or direction at the time the claimed act occurred, unless the protected partner 1) was directly involved in the specific activity in which the claimed act was committed or 2) had notice or knowledge of the claimed act at the time of occurrence and then failed to take reasonable steps to prevent or cure the claimed act.
In addition, the Texas RLLP law provides that a RLLP must carry at least $100,000 of liability insurance of a kind that is designed to cover the kind of act for which liability is limited by the RLLP provisions or must segregate cash or cash equivalents in such amount to satisfy any judgment for the kind of act for which liability is limited by the RLLP provisions.
Both RLLP statutes cover all general partnerships, not just personal service partnerships.
A Texas RLLP is formed by filing an application with the Secretary of the State together with a fee of $200 for each partner.
95-55,(10) the IRS held that a general partnership registered as a New York registered limited liability partnership (RLLP
) was a partnership for Federal tax purposes.
The law also permits partnerships to register as Limited Liability Partnerships (LLP), professional partnerships to register as Registered Limited Liability Partnerships (RLLP), and recognizes LLPs from other jurisdictions.
Most of the professional corporations would be converting to RLLPs - Registered Limited Liability Partnerships.