North Carolina Partnership Agreement

North Carolina partnership agreements promote a co-owned business’s health and organization since they solidify the conditions and terms two partners comply with. This is a contract, and thus, the rules defined within it to govern the business and regulate each partner’s behavior, role, and status are binding so long as they comply with North Carolina law.

Last updated January 11th, 2025

North Carolina partnership agreements promote a co-owned business’s health and organization since they solidify the conditions and terms two partners comply with. This is a contract, and thus, the rules defined within it to govern the business and regulate each partner’s behavior, role, and status are binding so long as they comply with North Carolina law.

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North Carolina Partnership Types (4)

Partnership Type State Filing Requirement
General Partnership (GP) Visit North Carolina Business Entity Search in order to verify the availability of the business name.
Limited Partnership (LP)
Certificate of Domestic Limited Partnership Including Optional Application As A Registered Limited Liability Partnership ($50.00)
Limited Liability Partnership (LLP)
Application for Registration of a Limited Liability Partnership ($125.00)
Limited Liability Limited Partnership (LLLP) Certificate of Domestic Limited Partnership Including Optional Application As A Registered Limited Liability Partnership ($125.00)

Fiduciary Duty

Partners in any type of partnership must furnish a complete “account to the partnership” for the benefits, partnership opportunities, profits, and properties they obtain because fo the partnership’s business, assets, or any other resource available through the entity.[1]

Every partner responds to a “demand” of “true and full information” regarding the partnership business whenever such a request originates from another partner. [2]

Each partner must observe North Carolina law by upholding their partnership agreement “obligations of good faith, diligence, reasonableness, and care” accordingly. [3]

The partners of a partnership are its agents, and therefore, “the act of every partner” binds the partnership so long as they possess the authority to act in this role, the transaction or agreement made is part of everyday business and they uphold their obligations and restrictions as defined by the partnership agreement and law. [4]

Partners observe and respect the “goodwill of the business” whenever necessary especially if they do not have the approval the other partners to do otherwise. [5]

Every partner must not interfere with the partnership in a way that prevents it from carrying on “ordinary business” and is especially forbidden from disruptive, negligent, reckless, or unlawful conduct. [6]

Partners must seek the approval of other partners in order to subject the partnership to a “claim or liability” arbitration or confess a judgment.[7] [8]

Liability

A limited partnerships frees the limited partners from obligations that arise with the “management or control of the business of the limited partnership” but only if they refrain from acting like a general partner or controlling the partnership business in any manner beyond their agreement. [9]
Partners of ordinary partnerships are liable “for the acts and obligations of the partnership” jointly as well as severally.[10]
Partners enjoy the liability protection a registered limited liability partnership grants; however, this is only the case during the time its registration as an LLLP is active and in good standing, freeing them from full liability “solely by reason” of being a partner.[11]
The general partners of a limited partnership are as accountable for the control and management over the LP’s business and thus assume the partnership obligations and liabilities as if it were a partnership “without limited partners.” [12]
General partners in a limited liability limited partnership enjoy the same “limitation on liability” (to third parties) that is available to general partners in a limited liability partnership.[13]

State Definitions (6)

General partner means the legal entity that is formally “named in” the partnership agreement or certificate of limited partnership as general partner.[14]
Limited partner means the person who is allowed in a partnership specifically “in accordance” with the business’s partnership agreement. [15]
Limited partnership means that “two or more persons” formed a partnership under New Carolina law where at least one is a limited partner while one or more are general partners.[16]
Limited liability limited partnership, as well as a “registered limited liability limited partnership,” means that a partnership originating in the state of North Carolina operates in compliance with G.S. 59-210.[17]
Foreign limited partnership means that the LP did not originate in NC because formed “under the laws of any state, province, country, or other jurisdiction” as well as owned by two or more partners, at least one of which designated as a limited partner and at least one other as a general partner.[18]
Foreign limited liability limited partnership means a limited partnership from a separate jurisdiction (e.g. another state or country) than North Carolina and “whose general partners have limited liability” for their LP’s obligations under said jurisdiction’s laws. [19]