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Formation of the Limited Partnership

A step-by-step guide.

The formation of a limited partnership requires the drafting of a limited partnership agreement, sometimes called the certificate of limited partnership. The certificate of limited partnership must be recorded locally in the office of the official in charge of public records. Ordinarily, this will be the office of the county clerk or recorder of deeds of the county in which the principal place of business of the limited partnership is located. Under RULPA, the limited partnership is formed when the certificate of limited partnership is filed. State law may limit the activities of the limited partnership. This information is usually supplied by the county clerk or recorder of deeds.

Checklist for Forming a Limited Partnership

The following matters must be covered to complete an effective limited partnership agreement:

. Name;
Principal place of business;
Agent for service of process;
Character or purpose of the limited partnership;
Term of the limited partnership;
Identity of the general partner or partners;
Number, identity, and manner of admitting a limited partner;
Whether a limited partner may assign her interest, and if so, the procedures for doing so;
Manner of terminating the limited partnership;
Tax year-end;
Method of accounting to be used (i.e., cash or accrual);
Contribution in the way of capital (a description of the cash, property, or services);
Determined factors as to whether additional capital contributions are required, and if so, in what form (i.e., cash, property, or services);
Allocation of profits and losses;
Whether any general partner is to be paid compensation, and for what services;
Review applicable tax problems and tax elections;
Review local statutes for possible problems.