4. Annual Filing Requirement

The Act includes new Section 1001(d) which provides that a partnership's status as an LLP remains effective until it is revoked by a vote of the partners or is canceled by the Secretary of State under new Section 1003(c) for the failure to file an annual report or pay the required annual fees. Most states provide that unless an LLP timely files an annual registration statement, its LLP status is "automatically" terminated but may be resurrected prospectively only with a subsequent corrective filing. Under this view, an operating partnership may have significant "gaps" in its shield which is further complicated by sourcing rules necessary to determine when a partnership obligation belongs to the shielded LLP or the unshielded partnership. As with corporations and limited liability companies, the Act preserves the LLP status and the partners' liability shield unless the LLP status is revoked by the partners or canceled by the Secretary of State. In the latter case, potential gaps in the liability shield are cured with a retroactive resurrection of the LLP status if a corrective filing is made within two years (Section 1003(e)).

The LLP Drafting Committee wishes to express its gratitude to the Reporter for this project, Professor Carter G. Bishop of Suffolk University Law School. Professor Bishop's comprehensive knowledge of partnership law and tax and his drafting expertise were instrumental in enabling the Drafting Committee to complete this project in one year. The Drafting Committee also wishes to thank the following advisors and observers, whose expertise and advice were very important to the success of this project: Elizabeth G. Hester of Richmond, Virginia (ABA Advisor); Lou Conti of Orlando, Florida (ABA Section of Business Law Advisor); Steven G. Frost of Chicago, Illinois (ABA Section of Taxation Advisor); Professor Thomas E. Geu of the University of South Dakota School of Law (ABA Section of Real Property, Probate and