How To

How to Form a Limited Partnership

Contributor
By eHow Contributing Writer
(10 Ratings)

Limited partners invest in a company but are not involved in the management of the business. They assume only limited liability.

Difficulty: Moderately challenging
Instructions

Things You'll Need:

  • Assumed Name Certificates
  • Business Books
  • EIN
  • SBA Licenses
  • Banks
  • Business Loans
  • Legal Services
  • Business loans
  1. Step 1

    Obtain all required local, state and federal licenses and permits. Contact the Small Business Administration to find out which ones you'll need.

  2. Step 2

    Get an Assumed Named Certificate by registering a business name in the county where the company does business. The words "Limited Partnership" must be contained in the name of the partnership.

  3. Step 3

    Get an Employer Identification Number from the IRS using Form SS-4.

  4. Step 4

    Obtain a State ID Number as well from the state Department of Revenue.

  5. Step 5

    Write a partnership agreement that addresses profit sharing, asset distribution, participation rights, dissolution prevention, a buy-out agreement, asset appraisal and expulsion or addition of partners. It's advisable to engage the services of an attorney in drafting up such a document.

  6. Step 6

    File a Certificate of Limited Partnership with the Secretary of State.

Tips & Warnings
  • General partners are personally liable for all debts, while limited partners are only responsible up to the value of their investment in the partnership.
  • All partners report profits and losses on their individual income tax returns.
  • If a limited partner gets involved in managing the company, he or she may become personally liable for all debts.

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