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Get While the Getting’s Good: Checklist of Info You Need to Form a Limited Partnership

You have been retained to advise your clients in forming a limited partnership and to draft a limited partnership agreement. Where to begin? Always start with information gathering. To help organize the process for you, here’s a handy checklist of the information you’ll need from your clients.

Some of this information is basic and your clients will be able to provide it easily, but others will require some explanation and discussion on your part. Be prepared to explain what you seek and why, and the pros and cons of their response.

  • ___ Name, address, and marital status of each general partner and limited partner
  • ___ Name of limited partnership
  • ___ Street address of limited partnership’s principal executive office in California and other offices
  • ___ Term of limited partnership
  • ___ Scope of limited partnership’s business
  • ___ Business with affiliated entities
  • ___ Financing of partnership’s business
  • ___ Partners’ respective ownership interests in limited partnership
  • ___ Initial capital contributions
  • ___ Additional capital contributions
  • ___ Interest on capital contribution
  • ___ Return of capital
  • ___ Distributions
  • ___ Allocations
  • ___ Rights and obligations of general and limited partners
  • ___ Compensation to partners and affiliates
  • ___ Right to reimbursement of expenses incurred in connection with limited partnership’s business
  • ___ Liability and indemnification
  • ___ Time general partners devote to limited partnership business and right of general partners to engage in competing activities
  • ___ Maintenance and accessibility of books and records
  • ___ Tax year (IRC §706)
  • ___ Method of accounting
  • ___ Transfers of partnership interests
  • ___ Buy-out rights
  • ___ Terms for admitting additional partners
  • ___ Removal of general partner
  • ___ Events of dissolution
  • ___ Amendments to partnership agreement
  • ___ Dispute and resolution procedures

This checklist is also an excellent basis for an agenda for the initial client meeting. You may also need this information to complete a Certificate of Limited Partnership (Secretary of State Form LP-1) and other documents on behalf of the limited partnership.

You’ll need a lot of information from your clients when they come to you seeking to form a limited partnership. Without a checklist of the information you need, you’ll inevitably forget to ask for something and have to embarrassingly go back to your clients.

Not yet up to speed on each of these points? CEB’s got your covered with its Advising California Partnerships. Also check out CEB’s program Buy-Sell Agreements for California Businesses, an essential element for most partnerships.

© The Regents of the University of California, 2012. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited.

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