Types of California Business Partnerships– General Partnerships, Limited Partnerships & Limited Liability Partnerships

In California, a business partnership can be created by a formal written contract filed in state records, or by something as simple as an oral agreement.  The different types of partnerships have different requirements.

A general partnership is the easiest partnership to form since you are not required to register this type of partnership at the state level.  The partnership could simply be based on an oral agreement.   In California, this type of partnership means that two or more people are engaged in a business for profit. Except as otherwise provided by law or a written partnership agreement, all partners are liable jointly and severally for all obligations of the partnership. Profits are taxed as personal income for the partners. A general partnership can be registered with the Secretary of State, but this is optional.

A limited partnership may provide limited liability for some partners. There must be at least one general partner that acts as the controlling partner.  The other, limited partner(s)’ liability is limited in concern to the amount of control or participation in the partnership.  Therefore, the general partners have unlimited personal liability for the partnership's debts and obligation. To form an LP, a Certificate of Limited Partnership (Form LP-1) must be filed with the California Secretary of State.

A limited liability partnership is a partnership in which all the partners receive limited liability protection. Unlike a limited partnership, each partner can actively control and participate in the partnership. In California, this type of partnership is only permitted for persons licensed to practice and conduct business in public accountancy, law, or architecture.  An LLP is required to maintain certain levels of insurance as required by law. To register an LLP, an Application to Register a Limited Liability Partnership (Form LLP-1) must be filed with the California Secretary of State.  LLP’s also are required to follow specific tax rules, such as issuing and reporting Schedule K-1 forms to the IRS and paying an annual LLP tax.

For more information regarding starting your own business, please contact Richardson “Red” Griswold of Griswold Law at (858) 481-1300 or

Griswold Law is always posting articles about concepts and issues involved with running a business.  Be sure to check out the complete list of these articles!


  • There are no suggestions because the search field is empty.


See all

Recent Posts