Loading...
Limited Partnership2018-04-16T07:21:30+00:00

Limited Partnership

A limited partnership (LP) consists of at least one general partner (GP) and one limited partner (LP).

A certificate must be filed with the Secretary of State to form an LP.

The GP manages and controls the business and is liable for the debts of the LP.  In California, the LP may not manage the business without forfeiting its limited liability status.

Tax Consequences

Income that you receive as a GP or LP is taxed as an individual (no double taxation like a corporation).

See a CPA/tax consultant for the exact tax ramifications of starting your business as a Limited Partnership.

Liability of a Limited Partnerships

All GPs are jointly and severally liable for the debts of the partnership, whereas LPs are only liable for the assets they have contributed to the partnership.

Pros

  • Fairly Easy to start
    • File the required certificate with the Secretary of State.
  • Low initial start-up costs
    • Certificate filings, business licenses, and fictitious name statements are relatively inexpensive to file. Please see your local jurisdiction for actual costs.

Cons

  • Unlimited GP Personal Liability
    • All of a GPs personal assets are at risk if someone files a lawsuit against you or if you borrow money and creditors demand it. If you have insurance, it is possible that the insurance company may deny the claim or the claim may exceed your policy limits.

NOTICE: The information on this website does not constitute legal advice and you should not rely on any information without seeking the advice of a competent attorney licensed to practice in your jurisdiction. This web site is both a communication and/or solicitation as defined by California Rules of Professional Conduct, rule 1-400. For further information, please click here.

LET’S WORK TOGETHER

We listen to our clients to understand their individual needs and give them the highest quality advice possible.

SCHEDULE APPOINTMENT
DON’T MISS OUT!
Subscribe To Newsletter
Be the first to get latest updates and exclusive content straight to your email inbox.
Stay Updated
Give it a try, you can unsubscribe anytime.
close-link