California entrepreneurs may be interested to know what a limited partnership is and if it is right for their business. A limited partnership is a business structure that involves two types of partners: a limited partner and a general partner. A limited partner is a partner who provides capital to the business but does not manage the business in any way and is not liable for partnership obligations. A general partner is one that manages the business, does all of the decision-making and is liable for partnership obligations. There must be at least one of each type of partner for a limited partnership to be formed. A California-owned business must file a Certificate of Limited Partnership form with the Secretary of State's office.
Foreign-owned limited partnerships are partnerships that formed outside of the state of California. In order for a foreign-owned business to register as a limited partnership, a Foreign Limited Partnership Application for Registration form must be filed with the California Secretary of State's office for statutory compliance review. A Certificate of Registration will be given to the business once the Secretary of State's office is finished with its review.