SSM
  • Home
  • News
  • Team
    • Teela Crosthwaite Smith
    • Lindsey S. Mignano
    • Kelly Lawton-Abbott
    • Seth Pardee
    • Jessica Ryland
    • Courtney T Chew
    • Jennifer Junkin
    • Eric A. Cox II
    • Philip Omorogbe
    • Nichola Rohr
    • Shinjini Ray
    • Jason Galek
    • Makell Morrill
    • Tyler Collins
    • Dana Short
  • Deck
  • Blog
  • Contact
  • Home
  • News
  • Team
    • Teela Crosthwaite Smith
    • Lindsey S. Mignano
    • Kelly Lawton-Abbott
    • Seth Pardee
    • Jessica Ryland
    • Courtney T Chew
    • Jennifer Junkin
    • Eric A. Cox II
    • Philip Omorogbe
    • Nichola Rohr
    • Shinjini Ray
    • Jason Galek
    • Makell Morrill
    • Tyler Collins
    • Dana Short
  • Deck
  • Blog
  • Contact
Search

blog

General, Limited, and Limited Liability Partnerships in California

10/25/2016

 
When two or more small business owners or entities come together to form a business, they are sometimes perplexed as to whether to form a partnership, and exactly what type of partnership to form.  To that end, the ladies of Smith Shapourian Mignano LLP discuss partnerships generally, and the three different types of partnerships in California.

***

Partnerships, Generally

In California, the Revised Uniform Partnership Act (RUPA) governs the formation, operation, and liquidation of all partnerships formed after January 1, 1999.  A partnership is a business arrangement where two or more business owners or entities come together to form a business.  Unlike a limited liability company (“LLC”), which can consist of a sole member, a partnership requires two or more owners or entities.

General Partnership

In California, one may file a Statement of Partnership Authority (Form GP-1) with the Secretary of State to register a general partnership.  In a general partnership, each partner contributes money, (personal or real) property, labor, and/or other special skills to the partnership.  

Each partner shares in the profits and losses from the business, and each partner may actively manage or control the business. This means that each owner has authority to make decisions about how the business operates, as well as the authority to make legally binding decisions on behalf of the business, absent  some other specified arrangement in a partnership agreement.

Finally, there is no limit on each partner’s personal responsibility for the debts of the business.  This means that each partner could lose more than just his or her investment in the business, and€“ that each general partner’s personal assets could be accessed to pay business debts.  Each general partner is "jointly and severably" liable for debts of the business.

Limited Partnership

In California, one may file a Certificate of Limited Partnership (LP-1) with the Secretary of State to register a limited partnership.  Unlike a general partnership, a limited partnership may include both limited and general partners.  The partnership agreement will likely specify exactly which of the partners are general partners versus limited partners.

A limited partner is one who does not assume responsibility for the debts of the partnership. Therefore, the most a limited partner risks is his or her investment in the business.  However, the limited partner lacks management control and/or authority to operate the business.  For this reason, the limited partner is often regarded as a passive investor in the business.

A limited partnership must have at least one general partner, who is responsible for operating the business and controlling the day-to-day affairs of the business.  As discussed above, the general partner has the authority to make legally binding business decisions on behalf of the partnership.  General partners are subject to unlimited personal liability for the debts of the business, and are jointly and severably liable for the debts of the business.  

Limited Liability Partnership

In California, one may file an Application to Register a Limited Liability Partnership (LLP-1) with the Secretary of State to register a limited liability partnership (“LLP”).

In an LLP, all the partners receive limited liability protection, and all the partners can take an active role in managing the day-to-day affairs of the business.  The partners will likely articulate the structure of the organization and the distribution of profits and losses in a partnership agreement.

Most notably, the LLP form of ownership is limited in the State of California to persons licensed to practice in the fields of public accountancy, law, or architecture.  In addition, pursuant to the recently chaptered SB 284, engineers and land surveyors are also included in the professions that can be formed as an LLP until January 1, 2019.

***

Smith Shapourian & Mignano, LLP is available to answer any questions or concerns you may have regarding forming a partnership for your business.  Please feel free to contact us for a consultation.

This blog does not constitute solicitation or provision of legal advice, and does not establish an attorney-client relationship. This blog should not be used as a substitute for obtaining legal advice from an attorney licensed or authorized to practice in your jurisdiction. You should always consult a suitably qualified attorney regarding any specific legal problem or matter in a timely manner, as statutes of limitations may bar your claim.

​
Edwin Castro
2/26/2023 08:05:25 pm

"As much as I am shocked and ecstatic to have won the Powerball drawing, the real winner is the California public school system". No one would convince me that winning this lottery Powerball or mega millions is not something that changes the way and view of life's prospects. My name is Edwin Castro and I am from California, United States. I won the Powerball Lottery on Nov 7 2022 and I am coming to say a wonderful and big thanks to Dr Anokokudo for helping me with the winning numbers for the Powerball Lottery. I was really overwhelmed the day I contacted Dr Anokokudo to help me win the California Powerball Lottery when he instructed me what to do. The time came to play the lottery and I did and believe me, it was exhilarating. I won the Powerball $2.04 Billion and collected the lump sum of $997.6 Million and the November Powerball drawing raised a record $156.3 million for the California public school system. I am indeed thankful to Dr Anokokudo and others who helped me with his contact. Anyone who reads my comments should also try to contact Dr Anokokudo at [email protected]


Comments are closed.

    Archives

    February 2023
    October 2022
    September 2022
    September 2021
    June 2021
    May 2021
    March 2021
    January 2021
    December 2020
    October 2020
    September 2020
    August 2020
    June 2020
    May 2020
    April 2020
    March 2020
    January 2020
    June 2019
    April 2019
    March 2019
    February 2019
    November 2018
    October 2018
    September 2018
    May 2018
    April 2018
    March 2018
    February 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    January 2017
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016

    Categories

    All
    83(b) Elections
    Arbitration
    Benefit Corporation
    Bootstrapping
    Business Name
    Buy-Sell Agreement
    Cannabis
    CBD
    Cloud
    Commercial Lease
    Contracts
    Conversion
    Coronavirus
    Crowdfunding
    Delaware Flip
    Dissolution
    Early Hires
    Employers
    Employment Law
    Entrepreneurs
    Entrepreneur Spotlight
    Financials
    Funding/Financing
    GDPR
    Guest Blogger
    Health Care
    HR
    Industrial Hemp
    Insurance
    IT Solutions
    Joint Ventures
    Litigation
    LLC
    LOEN
    Logo
    Marketing
    Non Profits
    Non-Profits
    Partnerships
    Patent
    Pitch Deck
    Privacy Policy
    Professional Corporation
    Raising Money
    S Corp
    Securities
    Settlement
    Small Business
    Sole Proprietorship
    Startups
    Stock Options
    Tax
    Trademarks
    Website

    RSS Feed


​© 2024 SSM Law PC.  All Rights Reserved.
Privacy Policy 
Terms of Use
Accessibility Statement

Attorney Advertising 
​Client Reviews & Testimonials

​

  • Home
  • News
  • Team
    • Teela Crosthwaite Smith
    • Lindsey S. Mignano
    • Kelly Lawton-Abbott
    • Seth Pardee
    • Jessica Ryland
    • Courtney T Chew
    • Jennifer Junkin
    • Eric A. Cox II
    • Philip Omorogbe
    • Nichola Rohr
    • Shinjini Ray
    • Jason Galek
    • Makell Morrill
    • Tyler Collins
    • Dana Short
  • Deck
  • Blog
  • Contact