California Partnership Agreement

California partnership agreements cement the regulations of a business owned by two or more individuals. Partners must adhere to their status as well as the partnership’s business hierarchy as defined in this agreement.

Last updated December 18th, 2024

California partnership agreements cement the regulations of a business owned by two or more individuals. Partners must adhere to their status as well as the partnership’s business hierarchy as defined in this agreement.

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California Partnership Types (4)

Partnership Type State Filing Requirement
General Partnership (GP) California Business Entity Search. Optional: Statement of Partnership Authority (Form GP-1) ($70.00)
Limited Partnership (LP) Certificate of Limited Partnership (LP) (Form LP1) ($70.00)
Application for Registration Foreign Limited Partnership (LP) ($70.00)
Limited Liability Partnership (LLP) LLP-1 Application to Register a Limited Liability Partnership (LLP) ($70.00)
Limited Liability Limited Partnership (LLLP) LLP-1 Application to Register a Limited Liability Partnership (LLP)with a statement specifically electing to act as an LLLP.($70.00)

Fiduciary Duty

  • General Partners:
    • Duty Of Loyalty – General partners report “any property, profit, or benefit” gained from the partnership accordingly, refrain from competition with the partnership, and act in the partnership’s interests.
    • Duty Of Care – General partners comply with the law and partnership agreement while performing their duties with “good faith and fair dealing.”[1][2]
  • Limited Partner:
    • Limited partners do not have fiduciary obligations outside their partnership agreement but must “exercise any rights” of their status in good faith. [3]

Liability

  • Partners:
    • Partners are inducted into an active partnership and are not “personally liable” for any obligations placed on the partnership before the date of their admittance. [4]
    • Generally, partners in a LLPs enjoy some protection from being “accountable, directly or indirectly,” to the LLP’s debts or obligations. [5]
    • An LLP partner who has engaged in “tortious conduct” is potentially liable whenever held responsible by third parties.[6]
  • Limited Partners:
    • Limited partners do not carry liability with their roles; however, this protection risked is if the limited partner “participates in the control” of the partnership.[7]

State Definitions (5)

General partner means a person who, “with the consent of all the partners,” assumes the duties, liabilities, and responsibilities of managing the partnership according to the law and the partnership agreement in place. [8][9]
Limited Partner means a person approved by all partners for the limited partner role as “provided in a partnership agreement” accordingly.[10][11]
Partnership means whenever two or more people “carry on as co-owners of a business for profit.”[12]
Limited partnership (domestic limited partnership) means an entity that is composed of one or more general partners and one or more limited partners, formally registered as such with the state, and subject to California law. [13]
Partnership agreement means the contract between two or more partners “whether oral, implied, in a record, or in any combination” that establishes the conditions and terms of their partnership or limited partnership accordingly. . [14][15]