A California partnership’s filing requirements split between two agencies. The Secretary of State handles entity registration and a biennial Statement of Information for limited partnerships and limited liability partnerships. The Franchise Tax Board collects the $800 annual tax owed by LPs and LLPs and processes Form 565, the Partnership Return of Income, which every partnership doing business in California must file by March 15 for calendar-year entities. General partnerships skip the formation filing and the $800 tax, but they still file Form 565. Miss any of these and penalties stack up per partner.
Registering the Partnership
An LP files a Certificate of Limited Partnership (Form LP-1) with the Secretary of State. An LLP files an Application to Register a Limited Liability Partnership (Form LLP-1).1California Secretary of State. Application to Register a Limited Liability Partnership Form LLP-1 Both carry a $70 filing fee, and that filing is what brings the entity into legal existence with the state.
General partnerships don’t need to file formation documents to operate. A Statement of Partnership Authority (Form GP-1) is optional and can be used to put on the public record who has authority to act for the partnership.2California Secretary of State. California Statement of Partnership Authority Form GP-1
Separately, the partnership needs an Employer Identification Number from the IRS and a California identification number for state filings. Local business licenses and permits may also apply depending on the city, county, and type of activity.
Biennial Statement of Information
After the initial registration, LPs and LLPs file a Statement of Information with the Secretary of State every two years. It updates the principal office address, agent for service of process, and general partner details. The first one is due within 90 days of the original registration date, and subsequent filings follow a biennial schedule from that date.
General partnerships that filed a voluntary Statement of Partnership Authority aren’t subject to this biennial requirement. The Statement of Information is a non-tax filing handled entirely by the Secretary of State; it has no connection to the FTB obligations below.
The $800 Annual Tax
California charges every LP and LLP that is registered or doing business in the state $800 a year.3California Legislative Information. California Revenue and Taxation Code 17935 The tax applies every year regardless of income. An LP that lost money still owes $800. A dormant LLP that conducted no business still owes $800. The only way to stop the charge is to formally cancel the entity with the Secretary of State.
Payment is due on the 15th day of the third month after the close of the tax year. For a calendar-year partnership, that’s March 15.4Franchise Tax Board. Due Dates: Businesses It’s the same date as the Form 565 deadline, but the two obligations are independent. Extending the return doesn’t extend the payment.
General partnerships don’t owe the $800. That’s one practical tradeoff of the GP structure: fewer filings and no minimum tax, but no liability protection for the partners.
Form 565 and Schedule K-1
Every partnership that does business in California or earns California-source income must file Form 565, the Partnership Return of Income, with the FTB.5Franchise Tax Board. California Partnership Filing Requirements That includes GPs, LPs, and LLPs. Form 565 is an information return. The partnership itself generally pays no income tax; the return calculates total income, deductions, and credits that then flow through to the individual partners.
The partnership prepares a separate California Schedule K-1 (565) for each partner. Each K-1 reports that partner’s share of ordinary business income, rental income, interest, dividends, capital gains and losses, and other California-specific items. Partners use the K-1 to complete their own California returns. Capital accounts must be reported using the tax basis method.
The California return doesn’t stand alone. Partnerships also file federal Form 1065 with the IRS, which shares the March 15 due date for calendar-year entities.6Internal Revenue Service. Publication 509 (2026), Tax Calendars Most preparers build the federal return first and adjust for California differences. A six-month federal extension is available by filing Form 7004.7Internal Revenue Service. About Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns
Deadline and Automatic Extension
Form 565 is due the 15th day of the third month after the close of the tax year, so March 15 for calendar-year partnerships.4Franchise Tax Board. Due Dates: Businesses California grants an automatic seven-month extension, pushing the deadline to October 15 for calendar-year filers. No separate form is needed to claim it.
The extension covers the return only. The $800 annual tax is still due by March 15, and interest accrues on any unpaid balance after that date. The partnership also has to get completed K-1s to its partners in time for them to file their own returns.
Electronic Filing
Any partnership that prepares its return using tax software must e-file Form 565.8Franchise Tax Board. e-file for Business That applies to both original and amended returns, and since nearly every return today is prepared with software, paper filing is effectively limited to entities granted a waiver. The FTB waives the requirement for technology constraints, undue financial burden, or other reasonable cause. Payments can be made through the FTB’s Web Pay for Businesses portal without filing the full return at the same time.
Withholding on Nonresident Partners
A partnership with partners who aren’t California residents has an extra obligation. It must withhold California tax on distributions of California-source income to those nonresident partners at 7% of the gross payment or distribution exceeding $1,500 in a calendar year.9Franchise Tax Board. Pass-Through Entity Withholding
Withholding isn’t required when annual California-source distributions to a nonresident partner are $1,500 or less, when the distribution is exempt or nontaxable, or when the partner has an approved waiver (Form 588) from the FTB. The partnership reports payments on Form 592-Q during the year and files an annual reconciliation on Form 592-PTE by January 31 of the following year. Each nonresident partner receives Form 592-B showing amounts withheld. If the partnership fails to withhold, the FTB can assess the full amount, plus penalties and interest, against the partnership rather than the nonresident partner.
Pass-Through Entity Elective Tax
California offers an optional entity-level tax that works around the federal $10,000 cap on state and local tax deductions. For tax years through 2030, a qualifying partnership can elect to pay 9.3% on its qualified net income at the entity level.10Franchise Tax Board. Pass-Through Entity (PTE) Elective Tax The partnership deducts the payment on its federal return, and each partner takes a California credit for their share.
The election must be made on a timely-filed original return. It can’t be made on an amended return, and once made, it’s irrevocable for that year and binding on all partners. Publicly traded partnerships and entities required to be in a combined reporting group don’t qualify.
For tax years 2026 through 2030, the first installment is due by June 15 of the election year. The amount is the greater of $1,000 or 50% of the PTE tax paid for the prior year. The balance is due with the return. Missing or underpaying the June 15 installment doesn’t disqualify the election, but each partner’s credit drops by 12.5% of their share of the shortfall.
Partner Estimated Tax
Because partnership income passes through, the entity doesn’t make estimated income tax payments. Each partner is personally responsible for paying California estimated tax on their share.
California’s schedule isn’t an even four-way split. Payments are due as follows:11Franchise Tax Board. Estimated Tax Payments
- April 15: 30% of the estimated annual tax
- June 15: 40% of the estimated annual tax
- September 15: no payment due
- January 15 of the following year: 30% of the estimated annual tax
The September gap catches people off guard. Partners who follow the federal pattern of 25% each quarter can underpay the second installment and face a penalty even if the yearly total is correct. Partners avoid an underpayment penalty if their total withholding and estimated payments equal at least the smaller of 90% of the current year’s tax or 100% of the prior year’s tax. For partners whose prior-year California adjusted gross income exceeded $150,000 ($75,000 if married filing separately), the prior-year threshold rises to 110%.12Franchise Tax Board. 2025 Instructions for Form 540-ES Estimated Tax for Individuals
Penalties for Late Filing or Nonpayment
The penalty for filing Form 565 late, or filing it without the required information, is $18 per partner for each month the return is late, up to 12 months.13Franchise Tax Board. FTB 1024: Penalty Reference Chart A 10-partner LP that files four months late owes $720 in filing penalties alone, before any tax. Larger partnerships face much steeper consequences because the charge is per partner.
The penalty can be waived for reasonable cause, but the bar is high. Forgetting the deadline or waiting on a partner’s information typically doesn’t qualify. A partnership that sees a late filing coming should use the automatic extension to October 15, which costs nothing.
Late payment of the $800 annual tax carries its own interest and penalty charges. An LP or LLP that ignores both the return and the tax for several years can rack up thousands in combined amounts.
Cancelling the Partnership
The $800 annual tax keeps running every year an LP stays registered with the Secretary of State, even if the business has stopped operating.3California Legislative Information. California Revenue and Taxation Code 17935 The obligation ends when a certificate of cancellation is filed. This is the common trap for defunct partnerships: the owners assume the entity dies on its own, then discover years later that they owe thousands in back taxes.
To end an LP, file a Certificate of Cancellation (Form LP-4/7) with the Secretary of State.14California Secretary of State. Certificate of Cancellation Limited Partnership LLPs use their own cancellation form. A final Form 565 is filed with the FTB for the entity’s last tax year, with any remaining $800 payment, and the “final return” box checked. General partnerships that never registered with the Secretary of State have no cancellation filing, but they still file a final Form 565 for their last year of California activity.