Arizona Limited Partnership FAQ

Which agency handles limited partnerships in Arizona?

The Arizona Secretary of State. This is the single most important thing to get right, because Arizona splits business filings between two agencies. LLCs and corporations file with the Arizona Corporation Commission; limited partnerships and limited liability partnerships file with the Secretary of State. Most Arizona formation guides are written for LLCs and will point you to the wrong place.

What document creates the limited partnership?

The Certificate of Limited Partnership. Once the Secretary of State records it, your partnership legally exists and can hold property, open accounts, and sign contracts in its own name. The certificate names the partnership, its statutory agent, and its general partners — but not its limited partners.

How many partners do I need?

At least two roles have to be filled: one or more general partners and one or more limited partners. A single person cannot be the sole partner of a limited partnership, because the structure is defined by the split between managing general partners and passive limited partners. The same person or entity generally should not be the only general partner and the only limited partner.

How long does formation take?

Standard processing at the Secretary of State runs roughly two weeks. Plan around that window if you have a closing, a financing deadline, or a lease that depends on the partnership existing.

What is the difference between a general partner and a limited partner?

A general partner manages the partnership and is personally liable for its debts and obligations. A limited partner contributes capital and shares in profits but does not manage — and their liability is limited to what they invested. The whole point of the structure is to separate the people who run the business from the people who merely fund it.

Can a limited partner lose their liability protection?

Yes. A limited partner who crosses into actively managing the business can be treated as a general partner and lose the liability shield. Staying passive — voting on major matters and receiving information without directing operations — is what preserves the protection. This is why the limited partnership agreement should carefully define the boundary.

How do people protect the general partner from personal liability?

A very common approach is to make the general partner an LLC or corporation instead of an individual. The entity then absorbs the general partner's personal exposure. If you do this, you form two entities: the LLC or corporation at the Arizona Corporation Commission, and the limited partnership at the Secretary of State.

Are limited partners named publicly?

No. Only the statutory agent and the general partners appear on the public Certificate of Limited Partnership. Limited partners' identities, contributions, and ownership stakes stay in the private limited partnership agreement, which is never filed with the state.

What is a statutory agent?

It is Arizona's term for a registered agent — the official recipient of service of process and state correspondence for your partnership. The statutory agent's name and Arizona street address appear on the Certificate of Limited Partnership, and you must keep one on file for the life of the partnership.

Who can serve as the statutory agent?

Anyone with a physical Arizona street address who is available during business hours and consents to serve: a general partner, another trusted individual, or a commercial statutory agent service. A P.O. box alone is not enough, and the agent must formally accept the appointment.

Should a general partner use their home address?

They can, but it becomes public and searchable on the certificate. Many general partners use a commercial statutory agent specifically to keep a home address out of the public record and to make sure documents are always received, even when they are traveling.

How is an Arizona limited partnership taxed?

By default it is a pass-through entity. The partnership files a federal return on Form 1065 and issues a Schedule K-1 to each partner, who reports their share on their own return. There is no separate federal income tax at the entity level in the default case, and Arizona follows this pass-through treatment for state income tax.

Does an Arizona limited partnership file an annual report?

No. Arizona does not require limited partnerships to file an annual report with the Secretary of State. There is no recurring annual state report and no annual state fee tied to it. You still have to maintain a valid statutory agent and meet your tax obligations, but the yearly report many other states demand does not apply.

What do I have to keep current?

Keep your statutory agent valid, and amend the certificate if your partnership name, general partners, or agent change. File the partnership's federal and Arizona tax returns each year. If the business collects on taxable sales, register for a transaction privilege tax license with the Arizona Department of Revenue.

Do I need a business license?

Arizona has no single statewide general business license, but many professions and municipalities require their own licensing, and businesses with taxable sales need a transaction privilege tax license. These run separately from your Secretary of State registration.

How do I register an out-of-state limited partnership in Arizona?

You register as a foreign limited partnership with the Secretary of State, appointing an Arizona statutory agent and providing a recent certificate of good standing from your home state. Doing business in Arizona without registering can bar your partnership from suing in Arizona courts.

How do I change my statutory agent or general partners?

Statutory agent changes and amendments to the general partners are filed with the Secretary of State to keep the public certificate accurate. The incoming statutory agent must consent to the appointment before a change is completed.

How do I close an Arizona limited partnership?

You wind up the business — settle debts, distribute remaining assets to the partners, and handle final tax filings — then file to cancel the Certificate of Limited Partnership with the Secretary of State. Cancelling the public record is what formally ends the partnership's existence and stops future obligations from attaching.