Registering a Foreign Limited Partnership in California with Form LP-5

California's Uniform Limited Partnership Act of 2008 has a whole article for foreign limited partnerships. A partnership formed anywhere beyond California's borders can ask for a certificate of registration, and the Secretary of State's certificate confirms the partnership is qualified for intrastate business (Corporations Code sections 15909.02 and 15909.04). The application is Form LP-5, and a general partner signs it.

Registration does not change the partnership's home-state agreement or its governing law. It places the partnership on the Secretary of State's public record, lists its general partners and names the person or company that accepts lawsuits for it in California.

A limited liability limited partnership uses the same form and ticks the box in item 6 for foreign LLLPs.

The test is the same one California uses for other entities: repeated and successive transactions of business within California, with interstate and foreign commerce set aside. The Secretary of State cannot tell you whether your particular partnership meets it.

Section 15901.02 names activities that are not enough alone, and it says other activities may also fall outside the test:

• Handling a lawsuit, arbitration or administrative proceeding, or settling a claim
• Partner meetings and other internal affairs
• Bank accounts
• Selling through independent contractors
• Orders gathered here that only take effect after someone accepts them in another state
• Taking on debts, mortgages or liens, and collecting what is owed or enforcing collateral
• One isolated transaction wrapped up within 180 days, outside a series of similar ones
• Interstate commerce

Being a limited partner, shareholder, member or manager of another entity is also not enough on its own.

Where California departs from the usual rule

Many states put owning property on the list of things that do not count. California does the opposite for limited partnerships. Under section 15909.03(b), income-producing real estate or tangible personal property that the partnership owns in California is itself a transaction of business for registration purposes, except for property tied to the excluded activities above. A partnership that holds a rental building or leased equipment in the state should assume the registration question is a live one, even if it has no office or staff here.

The same section adds that the registration definition does not decide taxation, service of process or other regulation, which have their own tests.

The Secretary of State's fee for Form LP-5 is $70. Filing online through bizfile Online gets priority in the review queue. On paper, payment is by check or money order made out to the Secretary of State. Walking the form in, rather than mailing it, adds a $15 special handling charge. No processing time is published.

What the form requires

• The partnership's exact name as it appears on its good standing certificate
• A substitute name for California, only if the real one cannot be used
• Its home jurisdiction, matching the certificate
• The street address of the principal office (no P.O. box or in-care-of line), plus a mailing address if different
• The address of any office the home jurisdiction requires it to keep
• The agent for service of process
• The name and address of every general partner
• Whether it is a foreign limited liability limited partnership
• A general partner's signature

The partnership's name has to end with limited partnership, LP or L.P. A foreign LLLP instead uses limited liability limited partnership, LLLP or L.L.L.P. and may not use LP. Words such as bank, trust, trustee, incorporated and corporation are off limits, and a name that fails these rules has to be replaced by a compliant alternate before a certificate will issue.

This filing does need one. Form LP-5 states that a foreign certificate of good standing is required, and section 15909.02(b) wants a certificate of existence, or something of similar import, dated no more than six months before you submit. The official who keeps the partnership's public records at home has to sign it.

Order it from that office; the home jurisdiction sets the price. Time the order so the certificate is still inside the six months when the application reaches California. The name on the form and the jurisdiction in item 2 should match the certificate, so check it for typos before filing.

California's phrase is agent for service of process. Section 15901.16(d) lets the application name either a California-resident individual, whose street address is listed, or a corporation holding a section 1505 certificate. The corporate agent appears by name alone. The Secretary of State adds that no business entity may serve as its own agent and that a registered corporate agent should approve before it is named.

If the agent resigns or leaves the state, or the corporate agent stops being able to act, the partnership must promptly file an amendment designating a new one (section 15901.16). If the agent cannot be found with reasonable diligence, a court may allow service by hand delivery to the Secretary of State, which is complete on the tenth day, and the Secretary of State then mails the papers to the partnership's principal office.

Partnerships run from another state rarely have a California individual to name, so a registered corporate agent is the common choice.

Franchise tax

Registering with the Secretary of State brings an $800 annual tax owed to the Franchise Tax Board, due for every taxable year until a certificate of cancellation goes on file (Revenue and Taxation Code section 17935). Limited partnerships also file the Partnership Return of Income, Form 565, when they are engaged in business or have income from California sources.

Amendments and cancellation

An amendment to the application is required when a statement in it becomes wrong or changes, including a new agent or general partner. Form LP-6 is the amendment, and its fee is $30. A change of the partnership's name in its home jurisdiction also needs a fresh good standing certificate or a statement that the home law issues none. To leave California, the partnership files the Certificate of Cancellation, Form LP-4/7, which has no fee, and the tax obligation does not stop until that is filed.

The Secretary of State's foreign LP fee page lists no recurring Statement of Information for foreign partnerships, so this guide does not claim one. Check the current bizfile Online filing list for your entity.

Section 15909.07 sets out the consequences for a foreign LP that transacts intrastate business without a certificate of registration.

• It cannot maintain an action or proceeding in a California court.
• A penalty accrues at $20 for every day of unauthorized intrastate business, up to a ceiling of $10,000.
• For claims growing out of its California business, the Secretary of State is treated as its recipient for process.
• The Attorney General may file suit seeking to restrain it from operating in breach of the article (section 15909.08).

Two protections remain. A missing certificate leaves the partnership's contracts and acts valid and does not stop it from defending an action here. And no partner is liable for the partnership's obligations solely on account of the missing certificate.

Mainstay Filing does not run the checkout for limited partnerships, which handles LLCs and corporations. What it sells a partnership is the registered agent: $149 for the year, the same amount at renewal. The agent's California details are what you enter on Form LP-5, and they appear on the public record. A summons or other paper served on the partnership is scanned and put in your account before the business day closes, free of charge. Government letters get scanned free, up to three a year.

A partnership that is registered already can switch to Mainstay Filing as agent, and Mainstay Filing will file the amendment for the change, with the state's $30 amendment fee passed along at cost. Preparing Form LP-5 and ordering the home-state certificate stay with the partnership or its attorney. The California registered agent page has the details.

Mainstay Filing does not give legal advice. Partner liability and the property rule are matters for a California attorney.