How to Form a Limited Partnership

Limited partners invest in a company but are not involved in the management of the business. They assume only limited liability.

1. Step 1

   Obtain all required local, state and federal licenses and permits. Contact the Small Business Administration to find out which ones you'll need.

2. Step 2

   Get an Assumed Named Certificate by registering a business name in the county where the company does business. The words "Limited Partnership" must be contained in the name of the partnership.

3. Step 3

   Get an Employer Identification Number from the IRS using Form SS-4.

4. Step 4

   Obtain a State ID Number as well from the state Department of Revenue.

5. Step 5

   Write a partnership agreement that addresses profit sharing, asset distribution, participation rights, dissolution prevention, a buy-out agreement, asset appraisal and expulsion or addition of partners. It's advisable to engage the services of an attorney in drafting up such a document.

6. Step 6

   File a Certificate of Limited Partnership with the Secretary of State.