Limited Partnership

General format

Limited partnerships are formed by two or more people, with at least one person acting as the general partner who has management authority and personal liability, and at least one person in the role of limited partner who is a passive investor with no management authority. All partners – both general and limited – must enter into limited partnership by either oral or written agreement.

Limited partnerships are managed and controlled by general partners; general partners have authority to bind the partnership. Limited partners normally do not participate in managing the business.

The general partners are liable for partnership obligations to the same extent as partners of general partnerships. Limited partners, however, are generally not liable for partnership obligations; their only risk is their agreed capital contribution, or as provided in the partnership agreement. However, if limited partners participate in the management of the partnership business, they may lose their protected limited partner status and become liable for all risk.

All limited partnerships are required to file with the Secretary of State’s office.

A foreign limited partnership is a partnership formed under the laws of any state other than this state or under the laws of a foreign country and having one or more general partners and one or more limited partners.

Registration Procedure for Domestic Businesses

A limited partnership must complete and file a Certificate of Limited Partnership (Secretary of State Form LP-1).

Registration Procedure for Foreign Businesses

A foreign-owned limited partnership must complete and file a Foreign Limited Partnership Application for Registration (Secretary of State Form LP-5). The Foreign Limited Partnership Application for Registration identifies the principal executive office and the agent of record in California. Upon receipt, the Secretary of State’s Office will review the Foreign Limited Partnership Application for Registration for statutory compliance. Once the document is filed, the Secretary of State will return a file-stamped copy of the LP-5, plus a Certificate of Registration to the limited partnership.

Limited partnerships are required to pay an annual franchise tax in order to conduct business in California. State and federal tax liability on taxable income is passed through to the partners (see Section 6 of this booklet, Registering for Business Taxes).

Change or Dissolution

Change or dissolution occurs in accordance with specifications in the partnership agreement, and as provided in the relevant code provisions for the limited partnership.

To register a change in the limited partnership, the company must complete the Amendment to Certificate of Limited Partnerships (Secretary of State Form LP-2). Foreign firms must complete the Foreign Limited Partnership Amendment to Application for Registration (Secretary of State Form LP-6) and submit it to the Secretary of State with a required filing fee.

To register cancellation or dissolution of the limited partnership, the company must complete Limited Partnership Certificate of Cancellation (Secretary of State Form LP-4/7) and submit it to the Secretary of State. There is no filing fee.

For additional information regarding limited partnerships, contact:

Secretary of State
Document Filing Support Unit P.O. Box 944225 Sacramento, CA 94244-2250
Tel: (916) 657-5448
Website: http://www.sos.ca.gov/business/be/forms.htm#lp

Forms and References