A limited partnership is the standard legal structure for an investment fund such as a venture capital fund, private equity fund, hedge fund, or real estate investment fund. In this article, I’ll go through the specifics of how to properly set up a limited partnership in the state of Florida. At the end of the article, I’ve also included a fee schedule for all filing & document fees related to limited partnerships as well as a list of definitions relevant to limited partnership law (so if you don’t understand what a particular term in this article means, check the definitions at the end).

Choose a Partnership Name

Florida is one of the subset of states which allows you to create a variation of a limited partnership called a limited liability limited partnership (LLLP). At first glance, the LLLP appears to be an attractive business entity since it provides liability protection to the general partner (GP) unlike a traditional limited partnership. However, unless you are operating entirely within the state of Florida (which is nearly impossible given that you’ll likely at least be interacting with a bank, broker, or other financial company that isn’t based in Florida even if all your investors are in Florida), then I’d strongly recommend sticking to just a conventional LP structure and using another business entity such as an LLC for the GP. The reason for this is that not every jurisdiction has an entity equivalent to an LLLP which opens you up to potentially unprecedented lawsuits (expensive!). If you do insist on entertaining the use of an LLLP, I’d definitely recommend hiring an experienced lawyer to help you make that final decision and set everything up correctly.

For a limited partnership (LP) that is not a limited liability limited partnership (LLLP), the name must contain one of the following phrases or abbreviations:

• “limited partnership”
• “limited”
• “L.P.”
• “Ltd.”
• “LP”

In addition, the name must NOT contain any of the following phrases or abbreviations:

• “limited liability limited partnership”
• “L.L.L.P.”
• “LLLP”

The name must also be sufficiently distinguishable from all partnership names already on file with the state. You can check if your desired name or one substantially similar to it is already on record using the Sunbiz business name search engine. For reference, the full name rules are laid out in florida statute 620.1108.

File a Certificate of Limited Partnership

A certificate of limited partnership must be filed with the state, together with the necessary fees (described below in the “Partnership Fees” section and including both the filing of the “original certificate of limited partnership” fee and the “designation of registered agent” fee). The certificate of limited partnership must include the following items.

Partnership Name

Specify a name for limited partnership (in accordance with the name principles previously described).

Initial Designated Office

Specify both the physical street address of the initial designated office of the partnership as well as a mailing address. The mailing address can be the same as the street address, different, or even a P.O. box.

Initial Registered Agent & Office

Specify the name and street address of the initial registered agent for the partnership. If this registered agent is an individual, then they must sign the application accompanying the filing of the certificate of limited partnership. If the registered agent is a business entity, then a principal (individual) of that entity must sign to accept the obligations of registered agent.

When filing online, the signature requirement is fulfilled by having the registered agent type their name in the relevant signature block.

General Partner Information

Specify the name and business address of each general partner (GP). There must be at least one GP. Each GP that is not an individual must be organized or registered with the Florida Department of State, must maintain an active status, and must not be dissolved, revoked, or withdrawn.

Each general partner (or a principal of any GP which is a business entity) must sign the document. When filing online, the signature requirement is fulfilled by having each GP type their name in a designated signature block.

Limited Liability Limited Partnership Status

If the partnership is to be a limited liability limited partnership, then that must be specified in the certificate of partnership (or the same result accomplished by checking the relevant box in the online application).

Optional Other Items

A certificate of limited partnership may also contain other provisions, but may not override any of the non-waivable provisions specified in subsection (2) of Florida statute 620.1110.

Create a Strongly-Worded Written Partnership Agreement

Essentially, a partnership agreement is to a limited partnership what bylaws are to a corporation. We also have the following order of priority in application: if the partnership agreement conflicts with the certificate of limited partnership, then the partnership agreement prevails as to partners and transferees (see definitions section) whereas the certificate of limited partnership prevails as to persons, other than partners and transferees, that reasonably rely on the filed record to their detriment. Unfortunately, what provisions are actually included in a partnership agreement is a bit more ambiguous than is the case for corporate bylaws, as I’ll explain.

As defined by Florida law, “Partnership agreement” means the partners’ agreement, whether oral, implied, in a record, or in any combination thereof, concerning the limited partnership. The term includes the agreement as amended or restated.

This incredibly broad definition opens up the general partner(s) to lots of potential issues where a limited partner may argue that a particular presentation or oral conversation over the phone implied something different than what was written in a partnership agreement. To prevent every word you speak needing to be couched in protective legal disclaimers, it would be prudent for GPs to create a written partnership agreement that contains strong “containment” language so as to specify that this written partnership agreement, together with the certificate of limited partnership (and any other initial documents such as a Private Placement Memorandum and/or Subscription Agreement), supersedes any and all prior written or oral communications or agreements, represents the totality of the partnership agreement, and shall not be modified by any future oral or written agreements unless such modifications are in writing, clearly labeled as “amendments to” or “modifications of” the partnership agreement, and signed by the GP(s).

When deciding on what substance to actually include in a partnership agreement, consider addressing the issues on the following checklist.

Checklist for Drafting Partnership Agreement

Partnership Governance & Management

1. What voting rights will the limited partners have?
2. What major actions can the general partner(s) take or not take without limited partner approval? How broad are the management powers of the GP(s) and are there any explicit limits different than the default powers and limits specified in Florida limited partnership law? (particularly relevant statutes: 620.1118 f.s. and 620.1406 f.s.)
3. Which amendments to the partnership agreement can be effected solely by the GP without consent of the LPs? How are other amendments to the partnership agreement (or other documents such as the Certificate of Limited Partnership) made? What notice and/or time requirements are imposed for such amendments?
4. If there is more than one GP, what actions require the consent of more than one? What is the consensus mechanism (e.g. unanimity, majority, etc)?
5. What are the specific duties of the GP?
6. Is the GP required to dedicate any particular amount of time to partnership matters?
7. Are there any restrictions on or explicit allowances for how the GP or its affiliates engage in activities outside the partnership?
8. Are there any restrictions on the GP’s right to form other partnerships?
9. What sort of liability protections, if any, will the GP be afforded both in general and/or for specific acts taken on behalf of the partnership? Under what circumstances would the GP be liable to the partners for acts or omissions?
10. Under what conditions can the GP withdraw as GP?
11. Under what conditions and/or process will the GP cease to be GP (either by removal, incapacity, etc)?
12. What happens to the GP’s interest in the partnership when it ceases to be GP? Does that depend on how the GP came to cease being GP (e.g. removal, resignation, death, etc)?
13. Under what conditions can the partnership be dissolved? When is the dissolution definite vs when is there a choice? What happens in the case of a technical dissolution (e.g. due to failure to submit annual report in a timely fashion)?
14. What power of attorney is granted to the general partner?
15. Is there an arbitration clause governing disputes among the partners?
16. Are there any conditions under which limited partners would be personally liable beyond their capital contributions? (A default answer is provided in 620.1303 f.s., but that can be overriden by choice in the partnership agreement if desired.)
17. Where/how will meetings be held? How will meetings be called and what sort of notice is required? What quorum is necessary for meetings to be held or actions to be taken? Can any actions be taken by written consent of the partners without a meeting? Are any meetings mandated?

Records & Reports

1. What books & records must be maintained by the partnership?
2. What access rights will the limited partners have to such books & records? (note: you cannot reduce or remove the rights afforded by Florida statute 620.1304)
3. What reports will the limited partners be guaranteed to receive? (e.g. annual statement of partner positions, etc)
4. How will taxes be handled? How and when will tax information be made available to the limited partners?

Subscriptions (Capital Contributions & Distributions)

1. What are the initial capital contributions of each general partner and each limited partner?
2. Will partners be allowed to make additional capital contributions later if desired?
3. Will general or limited partners be required to make additional capital contributions if necessary? If so, what constitutes “necessary”?
4. What happens if a partner fails to make a required capital contribution? (e.g. perhaps a percentage penalty is imposed on the existing capital account of that partner)
5. Are limited partners brought on all at once or can additional limited partners be brought in after the partnership has begun operations? If new partners can be brought on, are there any limitations on how many or how often they can be brought in? Is approval of the general partner(s) sufficient to admit a new limited partner to the partnership or is limited partner approval also required?
6. Are partners allowed to withdraw their capital contributions? If so, what notice, time, and other conditions are required for such withdrawals to be allowed?
7. Is a partner entitled to interest on his or her capital contribution?
8. Does any partner have priority on distributions over any other partners?
9. How are distributions to be divided among the partners if such distributions are not in strict accordance with capital contributions?
10. How are tax allocations made?
11. Will the GP(s) be required to make up any deficits in capital accounts? If so, under what conditions would such requirement apply?
12. What is the timeline for distributions? Is it fixed or variable? If variable, what variables does it depend upon? Are there lock-ups during which distributions cannot be made? Do limited partners have the option to withdraw funds during this time anyway in exchange for a percentage penalty?
13. Will there be guaranteed distributions sufficient at least to cover taxes allocated to each partner?
14. How are distributions made in the event of partnership liquidation?

Profit & Loss Allocations

1. What fees are paid to the general partner?
2. What profit & loss of the partnership are allocated to the general partner? How is such incentive compensation or carried interest structured?
3. Are the fees and allocations dependent upon financial performance of the partnership and/or upon financial performance of some external benchmark such as a stock, commodity, or real estate index?
4. What reimbursements is the GP entitled to?

Assignment of Interests

1. Does a GP have the right to assign its interest in distributions?
2. Does an LP have the right to assign its interest in distributions?
3. Under what conditions is assignment restricted or prohibited?
4. What rights (in terms of partnership governance, future distributions, etc) does an assignee of a general or limited partner’s interest have?
5. What are the procedures for any such assignments?
6. What happens on the death, incompetency, bankruptcy, or divorce of a limited partner?

Note: Subscription information is often packaged into a “Subscription Agreement” that is labeled separately from the “Partnership Agreement”, but as I shared earlier, the Florida law definition of “partnership agreement” would encompass both contracts as well as any other legally binding documents between the partners. Hence, the choice to label a “subscription agreement” as something separate from a “partnership agreement” is purely one of preference.

Maintain the Limited Partnership in Good-Standing

To keep the limited partnership in good legal standing, you must file an annual report with the Florida Department of State between January 1 and May 1 of the year following the calendar year in which the limited partnership was formed (or in which a foreign limited partnership was authorized to transact business in Florida), and every year thereafter during the same time window.

Additionally, you must keep records for all “required information” (as defined in the definitions section at the end of this article).

Partnership Fees

Fee	Amount	Type
supplemental corporate fee	$88.75	Due annually for both domestic and foreign authorized limited partnerships. Submitted with the filing of the annual report under section 620.1210
Filing an annual report	$411.25	Due annually
Filing an original certificate of limited partnership	$965	One-time fee, due at formation
Filing an original application for registration as a foreign limited partnership	$965	One-time, due upon application (for foreign LPs only)
Filing a certificate designating a registered agent	$35	One-time, due at formation (or upon application for authorization for a foreign LP)
Filing a certificate of change of registered agent or registered office address	$35	Event-based (upon filing a certificate of the change)
Filing a certificate of amendment or restatement of the certificate of limited partnership	$52.50	Event-based
Requesting a certified copy	$52.50 for the first 15 pages, plus $1 per additional page	Event-based (for each certified copy request)
Requesting a certificate of status	$8.75	Event-based (for each certificate of status requested)
Filing a certificate of conversion	$52.50	Event-based
Filing a certificate of merger	$52.50 for each party to the merger	Event-based
Filing for reinstatement	$500 for each year or portion thereof that the limited partnership was administratively dissolved	Event-based
Filing a statement of termination	$52.50	Event-based
Filing a certificate of dissolution	$52.50	Event-based
Filing any other limited partnership document	$52.50	Event-based

Most of these fees are listed in statute 620.1109

Definitions

“Act” means the Florida Revised Uniform Limited Partnership Act of 2005, as amended.

“Limited partnership” includes the possibility of a “limited liability limited partnership” but not a “foreign limited liability partnership” which is an entity not organized under the laws of the state of Florida.

“Certificate of limited partnership” means the certificate required by section 620.1201. The term includes the certificate as amended or restated.

“Partnership agreement” means the partners’ agreement, whether oral, implied, in a record, or in any combination thereof, concerning the limited partnership. The term includes the agreement as amended or restated.

“Designated office” means the office that the limited partnership is required to designate and maintain under section 620.1114 (which need not be a place of its activity in Florida) OR, with respect to a foreign limited partnership, its principal office.

“Principal office” means the office at which the principal executive office of a limited partnership or foreign limited partnership is located, whether or not the office is located in this state. (Yeah, that definition seems a bit circular to me too.)

“Registered office” means the address of the registered agent meeting the requirements of section 620.1114. The registered agent must be either an individual residing in Florida or a company authorized to do business in Florida.

“Distribution” means a transfer of money or other property from a limited partnership to a partner in the partner’s capacity as partner or to a transferee on account of a transferable interest owned by the transferee.

“Transfer” includes an assignment, conveyance, deed, bill of sale, lease, mortgage, security interest, encumbrance, gift, or transfer by operation of law.

“Transferee” means a person to which all or part of a transferable interest has been transferred, whether or not the transferor is a partner.

“Transferable interest” means a partner’s right to receive distributions.

“Sign” means to: (a) execute or adopt a tangible symbol with the present intent to authenticate a record; or (b) attach or logically associate an electronic symbol, sound, or process to or with a record with the present intent to authenticate the record.

“Required information” means the information that a limited partnership is required to maintain under section 620.1111. More explicitly, it is the following information:

1. A current list showing the full name and last known street and mailing address of each partner, separately identifying the general partners, in alphabetical order, and the limited partners, in alphabetical order.
2. A copy of the initial certificate of limited partnership and all amendments to and restatements of the certificate, together with signed copies of any powers of attorney under which any certificate, amendment, or restatment has been signed.
3. A copy of any filed certificate of conversion or merger, together with the plan of conversion or plan of merger approved by the partners.
4. A copy of the limited partnership’s federal, state, and local income tax returns and reports, if any, for the 3 most recent years.
5. A copy of any partnership agreement made in a record and any amendment made in a record to any partnership agreement.
6. A copy of the financial statement of the limited partnership for the 3 most recent years.
7. A copy of the three most recent annual reports delivered by the limited partnership to the Department of State pursuant to section 620.1210.
8. A copy of any record made by the limited partnership during the past 3 years of any consent given by or vote taken of any partner pursuant to this act or the partnership agreement.
9. Unless contained in a partnership agreement made in a record, a record stating: (a) the amount of cash and a description and statement of the agreed value of the other benefits contributed and agreed to be contributed by each partner; (b) the times at which, or events on the happening of which, any additional contributions agreed to be made by each partner are made; (c) for any person that is both a general partner and a limited partner, a specification of transferable interest the person owns in each capacity; and (d) any events upon the happening of which the limited partnership is to be dissolved and its activities wound up.

Q&A

Question: Why does Florida code chapter 620 have TWO partnership acts? Which one applies to my limited partnership?

Answer: Florida chapter 620 has two parts: (I) the “Florida Revised Uniform Limited Partnership Act of 2005” (FRULPA) and (II) the “Revised Uniform Partnership Act” (RUPA). RUPA applies to general partnerships. FRULPA alone applies to limited partnerships (LPs) and limited liability limited partnerships (LLLPs).

You can read more about the history and intended context of these two acts here.

Question: What is the difference between the certificate of limited partnership and the partnership agreement?

Answer: The certificate of limited partnership is a specific document that must be filed with the state government of Florida in order for a limited partnership to have legal status as a business entity. The partnership agreement of a limited partnership is an abstract agreement that is the composite of all written and oral, express and implied agreements among the partners, including any amendments or restatements of such agreements.

Disclaimer

Nothing in this article constitutes legal advice. Make your own decisions and consult a lawyer if necessary or advantageous.