Documents Required to Dissolve A California Limited Partnership

By Holly Cameron

The legal form of limited partnership offers businesses a blend of limited liability and organizational flexibility. A limited partnership has two categories of partners: general partners run the business and accept personal liability for the debts of the partnership, and limited partners provide capital and do not generally participate in the management of the business. Limited partner liability is limited to the amount of capital a limited partner invests in the business.

The legal form of limited partnership offers businesses a blend of limited liability and organizational flexibility. A limited partnership has two categories of partners: general partners run the business and accept personal liability for the debts of the partnership, and limited partners provide capital and do not generally participate in the management of the business. Limited partner liability is limited to the amount of capital a limited partner invests in the business.

Legal Regulation of Limited Partnerships

California limited partnerships must file formal registration documents with the secretary of state and all partners must also sign a formal partnership agreement. To obtain registration as a limited partnership, the business must have at least one limited partner and at least one general partner. The California Corporations Code incorporates the Uniform Limited Partnership Act of 2008 and sets out the legal provisions for the formation, operation and dissolution of limited partnerships in the state.

Ready to start your LLC? Start an LLC Online Now

Events That Trigger Dissolution

Section 15908 of the California Corporations Code sets out the circumstances in which a limited partnership should be dissolved. These include when the partnership no longer has any general partners or all general partners and a majority of limited partners agree to dissolve the partnership. A court may also order dissolution if it determines it is no longer possible for the limited partnership to carry on its business in conformity with its partnership agreement.

Certificate of Cancellation

When a limited partnership dissolves, it must file a Certificate of Cancellation, Form LP-4/7, with the California Secretary of State. The form should include the 12-digit file number issued when the limited partnership was formed to ensure the correct entity is dissolved. The person completing the form must also insert the date when the initial Certificate of Limited Partnership was filed. All general partners must sign Form LP-4/7. You can complete and file the form online. Once Form LP-4/7 has been filed, the limited partnership is legally canceled and may no longer trade or conduct business.

Announcing the Dissolution

Although not essential under the law, it’s good practice to notify business associates of the dissolution of a limited partnership. The ex-partners can do this either by mailing individual clients or by putting a notice in a local newspaper or trade publication, depending on the nature of the business.

Tax Documents

Although a limited partnership does not pay income tax to the IRS, it must file an information return each year and, upon dissolution, should file a final return confirming the date of dissolution. Limited partnerships registered in California must pay the Franchise Tax Board an annual minimum tax of $800. Once the Certificate of Cancellation has been filed with the secretary of state, the general partners should confirm the date of dissolution with the Franchise Tax Board.

Ready to start your LLC? Start an LLC Online Now
How to Dissolve a Limited Partnership in New York State

References

Resources

Related articles

Comparison: LP and LLP

When forming a new business, it is important to select an appropriate business structure. You may consider a number of factors, such as the length of the business venture, the nature of the business and the level of involvement by the investors. Partnerships are a common option because they are relatively simple to set up and allow for a variety of management structures. A partnership may be formed as a general partnership, limited partnership or limited liability partnership.

South Carolina LLP Laws

South Carolina law regulates how a Limited Liability Partnership, or LLP, may form, operate, and ultimately dissolve. Unlike limited partnerships or general partnerships where one or more partners are personally liable for the debts of the business, an LLP limits liability for all partners. Each partner may participate in the management of the business, and receive a portion of the profits.

Ending a Partnership in Illinois

A partnership is a legally recognized business entity having at least two separate partners. Most partners sign a written partnership agreement to formalize their rights and obligations. Chapter 805 of the 2010 Illinois Code contains the Uniform Partnership Act of 1997 and sets out the relevant laws for forming, operating and ending a partnership. The repercussions of ending a partnership vary according to the size of the business, the financial position of the business and whether or not the partners can reach an amicable settlement.

LLCs, Corporations, Patents, Attorney Help

Related articles

The Limited Partnership Act in South Carolina

A limited partnership contains two categories of partners: general partners and limited partners. General partners ...

How to Start a Limited Partnership in Missouri

Missouri gives you many options to choose from when deciding on a business structure, including sole proprietorships, ...

How to Convert a General to a Limited Partnership

A general partnership is a contractual agreement between two or more people or entities to conduct business together. ...

How to Dissolve a Corporate Partnership in Idaho

In dissolving a partnership, the guiding document is the partnership agreement; it should be the first point of ...

Browse by category