Real estate groups, investment funds, family businesses, and joint ventures often involve partners with different roles, risk profiles, and expectations. Some invest capital and want limited liability. Others manage operations and take on day-to-day responsibility. A Limited Partnership (LP) makes this possible by dividing partners into active and passive roles — something traditional partnerships don’t allow.
But forming an LP in Texas involves more than filing paperwork. You need to choose the right entity structure, understand liability exposure, create partnership agreements, define capital contributions, and coordinate tax strategy. Without legal guidance, partners risk tax problems, liability exposure, and expensive disputes that strain business relationships.
At Strickland Law Firm, we help entrepreneurs and investors form a Limited Partnership in Houston with legal clarity, tax awareness, and transparent flat-fee pricing — so you know exactly what your formation will cost and how your partnership will operate.
A Limited Partnership is a business structure recognized under Texas law that consists of:
This structure separates management from investment, making it ideal when roles and risk levels are not equal.
LPs are often used for:
Under Texas law, LPs require state filings — unlike general partnerships, which can form automatically and unintentionally.
Texas entrepreneurs and investors choose LPs because they offer:
✓ Different Liability for Different Roles
General Partners run the business; Limited Partners have liability limited to their investment (if properly structured).
✓ Capital Raising Capability
LPs allow passive investors to contribute capital without participating in management.
✓ Pass-Through Taxation
Profits and losses flow to partners without entity-level corporate taxation.
✓ Flexible Allocation of Profits & Losses
Partners can allocate profits based on contributions, not just ownership percentages.
This structure creates alignment between investors and operators — something LLCs and Corporations don’t always do as cleanly.
Choosing the right entity avoids costly restructuring later. Key distinctions:
Limited Partnership (LP):
Limited Liability Company (LLC):
Limited Liability Partnership (LLP):
At Strickland Law Firm, we help you compare structures based on ownership, management, tax strategy, and long-term goals.
We’ve helped founders, investors, real estate groups, and family businesses form Limited Partnerships that align with their financial and operational goals. When you work with us, we:
Our approach ensures the LP is structured legally, financially, and strategically from the start.
A compliant LP formation typically includes:
✔ Certificate of Formation – Limited Partnership
Filed with Texas Secretary of State.
✔ Limited Partnership Agreement
Defines ownership, management, contributions, distributions, and dissolution.
✔ EIN (Employer Identification Number)
Required for banking, payroll, and tax filings.
✔ Registered Agent Designation
Required for legal notices and compliance.
✔ GP & LP Role Documentation
Clarifies rights and liabilities under Texas law.
Many online services skip or improperly handle these documents, leaving General and Limited Partners exposed to risk.
LPs are typically pass-through entities, meaning profits and losses are reported on partners’ personal returns. Depending on structure, an LP may also pair with an LLC for liability purposes — for example, by forming an LLC to act as the General Partner to shield owners from personal liability.
We collaborate with CPAs to ensure your LP formation aligns with tax strategy, investor needs, and long-term planning.
We understand the financial and relational stakes involved in partnerships. At Strickland Law Firm, we provide:
We structure Limited Partnerships to protect relationships, capital, and shared goals.
Fill out the form below and we’ll review your situation and contact you shortly.
While Texas does not require lawyers for state filings, Limited Partnerships involve liability, tax, and ownership considerations that templates and online services cannot address. A business law attorney ensures the LP Agreement accurately defines roles, distributions, contributions, and exits — preventing disputes and liability exposure later.
General Partners manage the business and have personal liability for partnership obligations (unless an entity such as an LLC is used as the GP). Limited Partners contribute capital and have liability limited to their investment, provided they do not participate in management. Structuring this correctly is essential.
Yes. Many LPs use an LLC as the General Partner to limit personal liability for individuals involved in management. This is common in real estate and investment structures and is often recommended as a risk management strategy.
LPs are typically taxed as pass-through entities, meaning income and losses flow onto partners’ personal returns. Unlike Corporations, there is no entity-level income tax in most cases. We coordinate with CPAs to ensure tax treatment aligns with partner goals.
Yes. Many partnerships convert as they scale, add investors, or restructure for liability or tax reasons. Texas law allows conversions, but they must be executed correctly to avoid tax or ownership complications. We assist with both initial formation and conversions.
If you’re forming a partnership with both active and passive owners, legal structure matters. Proper formation today prevents expensive disputes tomorrow.
Call Strickland Law Firm today to learn how to form a Limited Partnership in Houston.
