• Method of liquidating the interest of a deceased or retiring partner. • Circumstances under which a partner must withdraw from active participation, and arrangements for adjusting the partner’s salary and equity. • Whether or not surviving partners have the right to continue using the name of a deceased partner in the partnership name. • Basis for expulsion of a partner, method of notification of expulsion, and the disposition of any losses that arise from the delinquency of such a partner. • Period of time in which retiring or withdrawing partners may not engage in a competing business. • Procedures for handling the protracted disability of a partner. • How partnership accounts are to be kept. • The fiscal year of the partnership. • Whether or not interest is to be paid on the debit and credit balances in the partners’ accounts. • Where the partnership cash is to be deposited and who may sign checks. • Under what conditions limited partners may be accepted into the firm, and, if so, who shall be designated as the general partner. • Prohibition of the partners’ pledging, selling, hypothecating, or in any manner transferring their interest in the partnership except to other partners. • Identification of material contracts or agreements affecting the liability or operation of the partnership. LIMITED PARTNERSHIPS A limited partnership is a type of partnership in which the limited partners share in the partnership’s liability only up to the amount of their investment in the limited partnership. By statute, the limited partnership must have at least one general partner and one limited partner. The general partner has the right and responsibility to control the limited partnership, and is responsible for the debts and obligations of the limited partnership. The limited partner, in exchange for limited liability, generally does not participate in the day-to-day management and control of the business. Regulatory Requirements As is the case with general partnerships, a limited partnership will need to obtain business licenses if necessary, obtain federal and state tax identification numbers and may need to register the business name as an assumed name. A limited partnership that will hire employees, even if those employees are members of a partner’s immediate family, must obtain an unemployment insurance employer account number and worker’s compensation insurance for those employees. The limited partnership must file a certificate of limited partnership with the Secretary of State before commencing business. The filing requirements are discussed in the next section.
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