After reading our Selecting a Business Structure Series and speaking with your Business Law Attorney, you decided on a Limited Partnership structure for your business. You have filed your Certificate of Formation, enacted a Partnership Agreement, and received your Federal Employer Identification Number (FEIN).
You wonder what you should do with all of this paperwork, what you should keep, and for how long you should keep it. Throughout this blog, there will be different rules pertaining to Partnerships and LPs. See our blogs on these forms for more information.
What Documents Must Be Kept?
Texas law requires that Partnerships keep books and records of accounts. A current record of the name and mailing address of each owner or member of the filing entity must be kept at the registered office, principal place of business, or at the office of the entity’s transfer agent or registrar.
—See Books and Records for All Filing Entities—Tex. Bus. Org. Code §3.151(a)(3)
An LP is not required to maintain minutes of the proceedings of its owners, members, or governing authority and committees of the owners or governing authority, except to the extent it is required by its governing documents.
—See Books and Records for All Filing Entities—Tex. Bus. Org. Code §3.151(c)
It is important to note that all of the records of the Partnership may be kept in written paper form, or another form capable of being converted into written paper form within a reasonable time. This means your business can take steps to “go green” by keeping electronic copies of the records.
—See Books and Records for All Filing Entities—Tex. Bus. Org. Code §3.151(b) & Records—Tex. Bus. Org. Code §153.551(b)
Do Partnerships Require Additional Documents?
There are additional requirements for LPs. An LP must maintain a current list that states the name and mailing address of each partner, separately identifying in alphabetical order the general partners and the limited partners, the last known street address of the business or residence of each general partner, the percentage or other interest in the partnership owned by each partner, and the names of the partners who are members of each specified class or group if one or more classes or groups are established under the partnership agreement.
—See Records—Tex. Bus. Org. Code §153.551(a)(1)
Limited Partnerships (LP) must also keep a copy of its federal, state, and local information or income tax returns for each of its six most recent tax years, its partnership agreement and certificate of formation with all amendments or restatements, and books and records of its accounts. Copies of any document that creates classes or groups of partners, an executed copy of any powers of attorney under which the partnership agreement, certificate of formation, and all amendments or restatements to the agreement and certificate have been executed must be kept.
—See Records—Tex. Bus. Org. Code §153.551(a)(2)-(4), (6)
Finally, unless contained in the written partnership agreement, LPs must maintain a written statement of the amount of the cash contribution and a description and statement of the agreed value of any other contribution made by each partner, the amount of the cash contribution and a description and statement of the agreed value of any other contribution that the partner has agreed to make in the future as an additional contribution, the events requiring additional contributions to be made or the date on which additional contributions are to be made, the events requiring the winding up of the LP, and the date on which each partner in the LP became a partner.
—See Records—Tex. Bus. Org. Code §153.551(a)(5)
Where are Partnership Records Kept?
All records that Texas law requires to be kept by an LP must be maintained at its principal office in the United States, or make the records available in that office not later than the fifth day after the date on which a written request to examine the records is made. Additionally, LPs must keep the street address of its principal office in the U.S. in which the required records are maintained in its registered office in the state.
—See Records—Tex. Bus. Org. Code §153.551(a), (c)
A Partnership must keep its books and records, if any, at its chief executive office.
—See Books and Records of Partnership—Tex. Bus. Org. Code §152.212(b)
Who Has a Right to Examine the Records?
A partnership must provide access to its books and records to a partner, an agent or attorney of a partner, a former partner, or an agent or attorney of a former partner. The access provided to former partners or their agents or attorneys must only pertain to the period during which the former partner was a partner, or for any other purpose with respect to another period. The Partnership can impose a reasonable charge (covering labor costs and material) for copies of documents.
—See Books and Records of Partnership—Tex. Bus. Org. Code §152.212
A partner or an assignee of a partnership interest in an LP may examine and copy, in person or through a representative, required records other information regarding the business, affairs, and financial condition of the LP as is just and reasonable for the person to examine and copy. The partner or assignee must send a written request stating a proper purpose in order to examine the records. The records may be examined and copied at a reasonable time and at the requesting partner’s sole expense.
—See Examination of Records and Information—Tex. Bus. Org. Code §153.552(a)-(b)
On written request, the LP must provide the requesting partner or assignee without charge copies of the partnership agreement and certificate of formation with all amendments or restatements, and any tax return required to be kept.
—See Examination of Records and Information—Tex. Bus. Org. Code §153.552(c)
Be sure to speak with your business law attorney about any questions you may have regarding which records to keep. She can review your records to ensure that you are compliant with the requirements of Texas law.
–Authored by Carrie A. Harris, Esq.,
Matthew Harris Law, PLLC – Business Law Division
1001 Main Street, Suite 200, Lubbock, Texas, 79401-3309
Tel: (806) 702-4852 | Fax: (800) 985-9479