Management and Conduct of Business in a California Limited Partnership
Uniform LP Act 2008
Management and Conduct of Business in a California LP
September 14, 2026 · R|R Insights · CA Business Law Brief
Core Concept
California adopted the Uniform Limited Partnership Act (2001) with 2008 amendments (ULPA) effective January 1, 2008, codified at Cal. Corp. Code §§ 15900–15912. The ULPA fundamentally restructures how limited partnerships are managed, clarifying the roles of general and limited partners and providing a default governance framework that can be modified by the partnership agreement.
Under ULPA, general partners have the exclusive right to manage and conduct the ordinary business of the LP (§ 15904.06). Limited partners, by default, have no right to participate in management and do not act as agents of the LP. This separation is the foundational bargain of the LP structure: limited partners contribute capital and receive limited liability in exchange for ceding control to general partners.
ULPA departs from prior California LP law by being more ‘entity-centric’—the LP itself has rights and duties, and partners owe duties to the LP as an entity (not just to each other). The partnership agreement may alter many default rules, including granting limited partners certain management rights without losing their liability shield, provided the agreement is clear.
Key Rules
| General partner manages | Limited partner: no management right |
| Each general partner has equal rights in management of LP business absent agreement to the contrary (§ 15904.06(a)). | A limited partner has no right to participate in management; participating does not automatically create liability (ULPA modernizes the old ‘participation’ rule). |
| Unanimous consent required | GP has fiduciary duties |
| Acts outside the ordinary course of LP business require consent of all partners unless the partnership agreement provides otherwise (§ 15904.06(b)). | General partners owe duties of loyalty and care to the LP and to limited partners (§ 15904.08); limited partners owe no such duties. |
| Agency | Non-voting limited partners safe |
| Each general partner is an agent of the LP for acts apparently carrying on the LP’s ordinary business (§ 15903.02). | Under ULPA, a limited partner who participates in management is not automatically liable as a general partner; the old ‘control rule’ is abolished. |
Applies / Does Not Apply
| ✓ Applies When | ✗ Does Not Apply When |
| General partner of PE fund makes portfolio investment decisions | Limited partner who votes to remove a bad GP (permitted under ULPA without losing shield) |
| GP enters contracts on behalf of LP in ordinary course | An LLLP (limited liability limited partnership)—the GP also has a liability shield under § 15904.04 |
| GP seeks unanimous consent before dissolving LP or admitting new GPs | LP agreements that grant voting rights to limited partners on major decisions |
In Practice
| Transactional | Litigation |
| When drafting LP agreements, clearly delineate the GP’s management authority and the limited partners’ consent rights (if any). For PE funds, specify the investment committee composition, majority/unanimous vote thresholds, and GP removal procedures. Ensure the GP entity is adequately capitalized or backed by indemnification. | In LP disputes, examine the partnership agreement for any deviation from ULPA defaults. A limited partner seeking to challenge a GP’s decision must show a breach of the GP’s fiduciary duty—the business judgment rule applies and is very protective. |
This brief is for informational purposes only and does not constitute legal advice. For counsel on specific matters, consult qualified legal counsel. © 2026 Reden | Riddell LLP.