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Was the Decedent a Limited Partner?

Unlike a general partnership, California law places certain restrictions on the activites of a limited partner.  Unlike a general partner, a limited partner in a registered California limited partnership must refrain from active involvement in the business of the partnership.  The limited partner’s rights primarily relate to his or her receipt of profits.

When a limited partner dies, the executor or representative steps in his/her shoes and may take any action necessary to address those rights within the closing of the estate.  This is covered in California Probate Code Section 9763. This includes requesting an accounting of the partnership, if permitted by the Corporations Code. 

However, an executor or representative is not permitted to circumvent the rules governing limited partnerships and take an active role in the business.  Nor is an executor or representative normally permitted to cause a dissolution of the limited partnership simply because a limited partner passed away.

What if the decedent was the general partner in a limited partnership?  If this is the case, the representative may apply to the court to be replaced as the general partner, which is often granted by the Probate Court.  One factor which the court will look at is whether there was valid consent from the other partners (to the new general partner),  unless the limited partnership agreement does not require such consents.

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