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N Cal Attorney
N Cal Attorney, Attorney
Category: Business Law
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I own a small business, LLC, I am the sole owner at this time.

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I own a small business, LLC, I am the sole owner at this time. I want to bring in three of my employees as limited partners in the LLC. Is it better that I remain as the general partner or all of us be limited partners so long as the percentages add up to 100 percent.
Submitted: 7 years ago.
Category: Business Law
Expert:  N Cal Attorney replied 7 years ago.
At this stage in the development of a business, it is not unusual to form a crporation to be the general partner of the limited partnership. That helps protect the partners from personal liability.

You cannot all be limited partners. A limited partnership must have at least one general partner. See http://www.sos.ca.gov/business/lp/forms/lp-1.pdf See corporations code 15501 at http://leginfo.ca.gov/cgi-bin/displaycode?section=corp&group=15001-16000&file=15501-15534 that states: A limited partnership is a partnership formed by two or more
persons under the provisions of Section 15502, having as members one
or more general partners and one or more limited partners.

Actually you can be both a limited and a general partner, but there must be a general partner.

You should speak with a business and tax attorney about how to proceed with this. You can get a free consultation from several of the attorneys listed at http://lawyers.findlaw.com/lawyer/firm/Business-Organizations/Santa-Rosa/California#stq%3D0%26CITY%3D%26CONSULTATION%3Dtrue%26SPONSORED%3Dtrue
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