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A California LP may provide limited liability for some partners.
There must be at least one general partner that acts as the controlling partner and one limited partner whose liability is normally limited to the amount of control or participation of the limited partner.
General partners of an LP have unlimited personal liability for the LP’s debts and obligation. To form an LP in California, a (Form LP–1) must be filed with the California Secretary of State’s office.
A California GP must have two or more persons engaged in a business for profit.
Except as otherwise provided by law, all partners are liable jointly and severally for all obligations of the partnership unless agreed by the claimant. Profits are taxed as personal income for the partners.
To register a GP at the state level, a Statement of Partnership Authority (Form GP–1) must be filed with the California Secretary of State’s office. Note: Registering a GP at the state level is optional.
The Secretary of State’s office is the central filing office for certain financing statements and other lien documents provided for in the Uniform Commercial Code (UCC).
Filing with their office serves to perfect a security interest in named collateral and establish priority in case of debtor default or bankruptcy.
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