What is a Certificate of Limited Partnership?
In California, the Uniform Limited Partnership Act of 2008 (California Corporations Code Sections 15800, et seq.) governs the creation limited partnerships. Pursuant to California Corporations Code Section 15902.01(a), to create a limited partnership, the partners must first enter into a partnership agreement, then prepare, execute, and file with the California Secretary of State a document, known as a Certificate of Limited Partnership (the “Certificate”), setting forth, among other things:
- The name of the limited partnership
- The street address of the initial designated office
- The name and street address of the initial agent for service of process in accordance with law
- The name and address of each general partner
- The mailing address of the limited partnership (if different from the designated office)
While the Certificate may provide additional information concerning the partnership, it may not alter or affect the information required by Section 15901.10(b). California Corporations Code Section 15902.1(b). As far as the partners of a limited partnership are concerned, the partnership is formed on the effective date of the limited partnership agreement; however, until the Certificate is filed with the Secretary of State, the limited partnership does not exist to those who are not party to the agreement. Similarly, in the event any information contained in the Certificate is inconsistent with the partnership agreement, California Corporations Code Section 15902.1(d) provides, in pertinent part:
“(1) the partnership prevails as to partners and transferees; and
(2) the filed certificate of limited partnership . . . prevails as to persons, other than partners and transferees, that reasonably rely on the filed record to their detriment.”
In addition to forming the limited partnership, filing the Certificate obligates the partnership to pay the franchise taxes required by California Revenue and Taxation Code Section 17935 for the tax year in which it is filed. California Corporations Code Section 15902.1(g). In addition to filing the Certificate with the Secretary of State, many limited partnerships also record a copy of the Certificate in each California County in which the partnership does business.
Each business and business entity is unique. To understand the different options and which direction will be best for your situation, you need to consult with an experienced corporate attorney. Michael Leonard, Esq. of San Diego Corporate Law, named “Best of the Bar” by the San Diego Business Journal in 2016, has the expertise to guide you through everything from forming your business, to creating buy-sell agreements, to executing contracts, and anything in between. To schedule a consultation to discuss any business-related matter, please contact Mr. Leonard by visiting San Diego Corporate Law or by telephone at (858) 483‑9200.