632598256894

As you might expect, given the limited partnership‟s hybrid nature, the law requires both a written
agreement among the various general and limited partners and the filing of a Certificate of Limited
Partnership with the state, along with the appropriate initial and annual fees. The agreement sets forth
the partners‟ understanding of the items discussed earlier in the context of a general partnership. The
certificate sets forth the name and address of the partnership, its purposes, and the names and
addresses of its general partners. In many states, it is no longer necessary to reveal the names of the
limited partners, just as the names of corporate stockholders do not appear on a corporation‟s publicly
available incorporation documents.
Formation of Limited Liability Companies
The LLC is formed by filing a charter (e.g., a Certificate of Organization) with the state government
and paying a fee (usually similar to that charged for the formation of a corporation). The charter
normally sets forth the entity‟s name and address, its business purpose, and the names and addresses
of its managers (or persons authorized to act for the entity vis-à-vis the state if no managers are
appointed). The same broad description of the entity‟s business that is allowable for modern
corporations is acceptable for LLCs. The members of the LLC are also required to enter into an
operating agreement that sets forth their rights and obligations with regard to the business. These
agreements are generally modeled after the agreements signed by the partners in a general or limited
partnership.
Out-of-State Operation of Sole Proprietorships and Partnerships
Partly as a result of both the Commerce clause and Privileges and Immunities clause of the U.S.
Constitution, states may not place limits or restrictions on the operations of out-of-state sole
proprietors or general partnerships that are different from those placed on domestic businesses. Thus, a
state cannot force registration of a general partnership simply because its principal office is located
elsewhere, but it can require an out-of-state doctor to undergo the same licensing procedures it
requires of its own residents.
Out-of-State Operation of Corporations, Limited Partnerships, and
Limited Liability Companies
Things are different, however, with corporations, limited partnerships, and LLCs. As creations of the
individual states, they are not automatically entitled to recognition elsewhere. All states require (and
routinely grant) qualification as a foreign corporation, limited partnership, or LLC to nondomestic
entities doing business within their borders. This procedure normally requires the completion of a
form very similar to a corporate charter, limited partnership certificate, or LLC charter, and the
payment of an initial and annual fee, similar in amount to the fees paid by domestic entities. This,
incidentally, is one reason not to form a corporation in Delaware, if it will operate principally outside
that state. Much litigation has occurred over what constitutes “doing business” within a state for the