A limited partnership is composed of one or more general, and one or more limited partners. The general partners have management powers and are responsible for all partnership obligations. The defining characteristics of a limited partnership are that limited partners:
- Can invest capital in a business of the limited partnership
- Take a share in the profits
- Are not personally liable for the partnership’s debts and obligations; and
- Generally do not participate in the management of the business operations.
Limited partnership existence commences:
- With the filing of the certificate of limited partnership with the Secretary of State; or
- Within ninety days after filing as designated in the certificate.
Limited partnerships may transact any business in North Dakota except the business of banking and insurance (insurer backing claims). Farming is allowable only if:
- Any partners that are corporations or limited liability companies are farm corporations or limited liability companies in compliance with NDCC Chapter 10-06.1.
- Any partners that are partnerships, other limited partnerships, limited liability partnerships, or limited liability limited partnerships and that may have other entities as partners are in compliance with NDCC Chapter 10-06.1.
The limited partnership files a tax return but pays no entity-level income tax or net worth tax. Each partner is taxed directly upon its respective distributive share of the limited partnership’s profits.
A limited partnership must obtain appropriate licenses and register a Partnership Fictitious Name Certificate with the Secretary of State if a fictitious name is employed.
Partnership Fictitious Name Certificate
A limited partnership using a fictitious name in the transaction of business, must file a Partnership Fictitious Name Certificate with the Secretary of State. A fictitious name is a name other than the limited partnership name.
The registration of the Partnership Fictitious Name Certificate:
- Affords exclusive right to that name in the State of North Dakota. No other business may file a name with the Secretary of State that is the same as, or deceptively similar, to any registered name.
- Establishes a public record from which the names of the general partners can be identified.
Foreign Limited Partnership
A foreign limited partnership is one created under laws other than the laws of North Dakota. “Foreign” refers to limited partnerships created in jurisdictions out-of-state as well as out-of-country.
A foreign limited partnership must register with the Secretary of State:
- To transact business in North Dakota; or
- To obtain any license or permit issued according to North Dakota laws.
A foreign limited partnership using a name other than its limited partnership name must comply with the Partnership Fictitious Name Certificate requirement as described above.