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HomeCorporations CodeGENERAL PROVISIONS§ 6 Llc Partnership Net Worth Confirmation

§ 6 Llc Partnership Net Worth Confirmation

Corporations Code·California
AI Summary·Official Text·Key Terms·Related Statutes·References
AI SummaryVerified

§ 6 Llc Partnership Net Worth Confirmation

Key Takeaways

  • •A special kind of business (called a 'limited liability partnership') can choose to prove it has enough money by showing its 'net worth' instead of following other rules.
  • •To do this, the business must send a signed paper to the government every year, within 4 months after its fiscal year ends.
  • •If the business goes bankrupt but was following the rules before, it’s still considered okay during the bankruptcy process.
  • •This rule will disappear on January 1, 2034.

Example

A law firm is set up as a limited liability partnership and wants to avoid buying expensive insurance.

Instead of buying insurance, the firm can show it has enough money (like savings or property) by sending a form to the government every year. If they do this on time, they’re following the rules.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source
View on CA.gov

§ 6 Llc Partnership Net Worth Confirmation

Signature of authorized person executing this form _____ (c) Pursuant to subparagraph (D) of paragraph (1) of subdivision (a), subparagraph (D) of paragraph (2) of subdivision (a), subparagraph (D) of paragraph (3) of subdivision (a), or subparagraph (D) of paragraph (4) of subdivision (a), a registered limited liability partnership or foreign limited liability partnership may satisfy the requirements of this section by confirming that, as of the last day of its most recently completed fiscal year, it had a net worth equal to or exceeding the amount required. In order to comply with this alternative method of meeting the requirements established in this section, a registered limited liability partnership or foreign limited liability partnership shall file an annual confirmation with the Secretary of State’s office, signed by an authorized member of the registered limited liability partnership or foreign limited liability partnership, accompanied by a transmittal form as prescribed by subdivision (b). In order to be current in a given year, the partnership form for confirming compliance with the optional security requirement shall be on file within four months of the completion of the fiscal year and, upon being filed, shall constitute full compliance with the financial security requirements for purposes of this section as of the beginning of the fiscal year. A confirmation filed during any particular fiscal year shall continue to be effective for the first four months of the next succeeding fiscal year. (d) Neither the existence of the requirements of subdivision (a) nor the extent of the registered limited liability partnership’s or foreign limited liability partnership’s compliance with the alternative requirements in this section shall be admissible in court or in any way be made known to a jury or other trier of fact in determining an issue of liability for, or to the extent of, the damages in question. (e) Notwithstanding any other provision of this section, if a registered limited liability partnership or foreign limited liability partnership is otherwise in compliance with the terms of this section at the time that a bankruptcy or other insolvency proceeding is commenced with respect to the registered limited liability partnership or foreign limited liability partnership, it shall be deemed to be in compliance with this section during the pendency of the proceeding. A registered limited liability partnership that has been the subject of a proceeding and that conducts business after the proceeding ends shall thereafter comply with paragraph (1), (2), (3), or (4) of subdivision (a), in order to obtain the limitations on liability afforded by subdivision (c) of Section 16306. (f) This section shall remain in effect only until January 1, 2034, and as of that date is repealed. (Amended (as amended by Stats. 2018, Ch. 150, Sec. 7) by Stats. 2024, Ch. 361, Sec. 12. (AB 1862) Effective January 1, 2025. Repealed as of January 1, 2034, by its own provisions. See later operative version, as amended by Sec. 13 Stats. 2024, Ch. 361.)

Last verified: January 23, 2026

Key Terms

registered limited liability partnershipforeign limited liability partnershipnet worthfinancial security requirementsSecretary of State’s officefiscal year

Related Statutes

  • § 16951 Limited Liability Partnership Recognition
  • § 1 Llc Partnership Name Requirements
  • § 16954 Amending Llp Registration
  • § 16955 Partnership Conversion To Llp
  • § 16957 Llc Partnership Distribution Limits

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Corporations Code. Section 6.
View Official Source