The State of Delaware requires that all domestic and foreign-qualified Limited Partnerships list a General Partner in their formation papers. LPs are then also obligated to keep their General Partner information up to date in the Secretary of State database by filing a Certificate of Amendment in Delaware whenever their GP changes.
What makes compliance difficult?
- Many Delaware limited partnerships are not aware of the GP information requirement.
- It’s not flagged among other Delaware requirements, and the state does not send reminders.
- LPs are not required to file an annual report so updating any business information can be easily overlooked.
- The LP may not know what GP information was provided in the original formation filing.
- This is often due to personnel changes, both at the LP and at the LP’s law firm.
- Unless an LP has set up its own system for tracking and updating its GP information on file with the state of Delaware, it has no way to check its GP information on its own.
- GP information is not available on public Web sites, and it’s not indexed at the State.
- Only people with direct access to Delaware’s Secretary of State systems can research what GP information is on file for an LP — that means employees of Delaware, or a registered agent to whom Delaware has given direct access to their system.
- LP entity structures are becoming increasingly complex. The GP signatures may not be an individual but other LPs, and some LPs can go many layers deep.
How can this requirement impact me?
Delaware will reject or suspend any new filings or document requests when an LP is not in full compliance. This can negatively impact new business initiatives such as mergers, acquisitions, expansions, name changes, and the like, simply because new document filings or requests can’t be completed. The problem can go unnoticed for quite some time, and usually surfaces when the LP needs to make urgent filings.