Nevada Administrative Code Chapter 88 - Limited Partnerships
Nevada Administrative Code (NAC)
Chapter 88 — Limited Partnerships
Overview:
Chapter 88 governs limited partnerships (LPs) in Nevada, which are business entities composed of general partners (who manage the business and have unlimited liability) and limited partners (who contribute capital but have liability limited to their investment). This chapter establishes rules for formation, management, compliance, and dissolution to ensure the rights and obligations of all partners are protected under Nevada law.
1. Definitions and General Provisions (NAC 88.010 – NAC 88.050)
Key points:
Defines key terms:
General partner: a partner responsible for management and personally liable for debts.
Limited partner: a partner who contributes capital but is not involved in day-to-day management.
Partnership agreement: the governing document outlining rights, duties, and obligations of partners.
Clarifies the scope of NAC Chapter 88, applying to all limited partnerships in Nevada.
Establishes that LPs must comply with both statutory and administrative rules.
Why it matters:
Sets the legal framework for the roles, responsibilities, and regulatory obligations of all partners.
2. Formation of a Limited Partnership (NAC 88.060 – NAC 88.120)
Key points:
To form an LP:
File a certificate of limited partnership with the Nevada Secretary of State.
Include information such as: name of LP, names and addresses of general partners, and registered agent.
Specify the purpose of the partnership.
Requires a partnership agreement, though it may be oral or written, specifying:
Capital contributions.
Allocation of profits and losses.
Rights and duties of partners.
Why it matters:
Provides a legally recognized structure for conducting business and allocating liability between partners.
3. Amendments and Changes (NAC 88.130 – NAC 88.180)
Key points:
LPs can amend certificates or partnership agreements to reflect changes in:
Name of the partnership.
Address or registered agent.
Addition or withdrawal of partners.
Changes in business purpose.
Amendments must be filed with the Secretary of State to be legally effective.
Why it matters:
Ensures that official records are current, providing clarity for legal, financial, and contractual purposes.
4. Rights and Duties of Partners (NAC 88.190 – NAC 88.250)
Key points:
General partners:
Manage the business and are liable for debts.
Must act in good faith and in the best interest of the partnership.
Limited partners:
Typically have no management authority; doing so may expose them to liability.
Contribute capital and share in profits according to the partnership agreement.
Both types of partners must comply with the partnership agreement and statutory obligations.
Why it matters:
Balances the management authority and liability of partners, protecting investors and creditors.
5. Financial Management and Reporting (NAC 88.260 – NAC 88.310)
Key points:
LPs must maintain accurate records of:
Capital contributions.
Allocation of profits and losses.
Financial statements and tax filings.
General partners are responsible for financial management and reporting.
Limited partners may inspect records if specified in the partnership agreement.
Why it matters:
Ensures transparency, accountability, and compliance with tax and legal requirements.
6. Transfers of Interests (NAC 88.320 – NAC 88.360)
Key points:
Limited partners may transfer their interest with compliance to:
Partnership agreement restrictions.
Consent requirements from general partners or other limited partners.
Transfers of general partner interests typically require unanimous consent and may involve amendments to the certificate.
Properly documented transfers protect the rights of incoming and outgoing partners.
Why it matters:
Maintains stability and clarity in ownership, avoiding disputes over profits, liability, and control.
7. Dissolution and Winding Up (NAC 88.370 – NAC 88.420)
Key points:
LPs may dissolve:
By agreement of partners.
Upon expiration of term or purpose.
By court order in certain circumstances.
Winding up involves:
Settling debts and obligations.
Distributing remaining assets according to the partnership agreement.
Filing a certificate of cancellation with the Secretary of State.
Why it matters:
Provides a structured and legally compliant process for ending the partnership while protecting partners and creditors.
8. Penalties and Compliance (NAC 88.430 – NAC 88.460)
Key points:
Failure to comply with filing, reporting, or statutory requirements may result in:
Administrative penalties.
Personal liability for general partners.
Suspension or revocation of partnership status.
Partners are encouraged to maintain up-to-date filings and agreements.
Why it matters:
Ensures LPs operate lawfully and responsibly, reducing legal risk and protecting third parties.
✅ Summary of Key Rule Areas
| Rule Section | What It Regulates | Core Purpose |
|---|---|---|
| NAC 88.010–050 | Definitions and scope | Clarifies roles, responsibilities, and applicability |
| NAC 88.060–120 | Formation | Establishes legal creation of LPs |
| NAC 88.130–180 | Amendments | Provides procedures for updating official records |
| NAC 88.190–250 | Rights and duties | Balances authority and liability between partners |
| NAC 88.260–310 | Financial management | Ensures transparency and accountability |
| NAC 88.320–360 | Transfers of interest | Regulates ownership changes and consent |
| NAC 88.370–420 | Dissolution | Provides a lawful winding-up process |
| NAC 88.430–460 | Penalties and compliance | Enforces legal adherence and protects stakeholders |
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