California partnership 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 every California partnership must file by March 15 each year. Missing either the return or the tax triggers penalties that scale by the number of partners.
Registering the Partnership
What you file to form the entity depends on its structure. A limited partnership files a Certificate of Limited Partnership (Form LP-1) with the California Secretary of State. A limited liability partnership 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 both bring the entity into legal existence with the state.
General partnerships operate without any state formation filing. A GP can file a Statement of Partnership Authority (Form GP-1) if the partners want to put authority-to-act information on the public record, but the filing is optional.2California Secretary of State. California Statement of Partnership Authority Form GP-1
Biennial Statement of Information
After registration, LPs and LLPs must file a Statement of Information with the Secretary of State every two years. The filing 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 later filings follow on a biennial schedule from that anniversary.
General partnerships that filed a voluntary Statement of Partnership Authority are not subject to the biennial requirement. The Statement of Information runs entirely through the Secretary of State and is separate from anything owed to the Franchise Tax Board.
The $800 Annual Tax
California imposes an $800 annual tax on every LP and LLP that is registered or doing business in the state.3California Legislative Information. California Revenue and Taxation Code 17935 It applies every year regardless of income. An LP that loses money still owes $800. A dormant LLP that conducted no business still owes $800. The only way to stop the annual charge is to formally cancel the entity with the Secretary of State.
The $800 is due on the 15th day of the third month after the close of the tax year. For a calendar-year partnership, that means March 15.4Franchise Tax Board. Due Dates: Businesses This is the same date as the Form 565 return, but the two obligations run independently. If the partnership extends its filing deadline to October 15, the $800 payment is still due by March 15. Interest and penalties accrue on anything unpaid after that date.
General partnerships do not owe the $800 annual tax. That is one of the practical tradeoffs of the GP structure: fewer filings and no minimum tax, but no liability protection for the partners either.
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 Franchise Tax Board.5Franchise Tax Board. California Partnership Filing Requirements GPs, LPs, and LLPs all file it. Form 565 is an information return. The partnership itself generally does not pay income tax on the return; instead, it reports total income, deductions, and credits so those amounts can flow through to the partners.
Preparing the return means assembling gross receipts, cost of goods sold, ordinary business deductions, and any income from outside California. Partnerships with income from multiple states use California Schedule R to apportion and allocate that income between California and other jurisdictions.
The partnership must also prepare a separate California Schedule K-1 (565) for every partner.5Franchise Tax Board. California Partnership Filing Requirements 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 individual California returns. Capital accounts on Schedule K-1 are reported using the tax basis method.
The California return does not 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 partnerships prepare the federal return first and then adjust for California-specific differences on Form 565. A six-month automatic 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
Deadlines and the Automatic Extension
Form 565 is due on the 15th day of the third month after the close of the partnership’s tax year. For calendar-year partnerships, that is March 15.4Franchise Tax Board. Due Dates: Businesses California grants an automatic seven-month extension, pushing the extended deadline to the 15th day of the tenth month after year-end. For calendar-year filers, that lands on October 15.
The extension is automatic. No separate form goes to the FTB. What the extension does not do is push back the payment deadline for the $800 annual tax. That amount is still due by March 15, and interest starts accruing the next day on any unpaid balance. Partners also need their completed Schedule K-1s in time to prepare their own returns.
Withholding on Nonresident Partners
Partnerships with partners who are not California residents have a separate obligation. They must withhold California tax on distributions of California-source income to those nonresident partners. The withholding rate is 7% of the gross payment or distribution that exceeds $1,500 in a calendar year.8Franchise Tax Board. Pass-Through Entity Withholding
Withholding is not required when total California-source distributions to a nonresident partner are $1,500 or less for the year, when the distribution is exempt or nontaxable income, or when the partner has an approved withholding waiver (Form 588) from the FTB. The partnership reports payments on Form 592-Q throughout the year and files an annual reconciliation on Form 592-PTE by January 31 of the following year. Each nonresident partner receives a Form 592-B showing the amounts withheld.8Franchise Tax Board. Pass-Through Entity Withholding
If the partnership fails to withhold, the FTB can assess the full amount that should have been withheld, plus penalties and interest, against the partnership rather than pursuing the nonresident partner.
Pass-Through Entity Elective Tax
California offers partnerships 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 a 9.3% tax on its qualified net income at the entity level.9Franchise Tax Board. Pass-Through Entity (PTE) Elective Tax The partnership deducts that payment on its federal return, and each partner claims a credit on their California return for their share of the tax paid.
The election must be made on a timely-filed original return. It cannot be made on an amended return, and once made it is irrevocable for that year and binding on all partners. Publicly traded partnerships and entities required to be in a combined reporting group do not qualify.
For tax years 2026 through 2030, the first payment is due by June 15 of the election year. The required amount is either $1,000 or 50% of the PTE tax paid for the prior year, whichever is greater. The balance is due with the original return. A partnership that misses or underpays the June 15 installment can still make the election, but each partner’s credit is reduced by 12.5% of their share of the shortfall.9Franchise Tax Board. Pass-Through Entity (PTE) Elective Tax
Penalties for Filing Late or Not Paying
The penalty for filing Form 565 late, or filing without the required information, is $18 per partner for each month the return is late, up to 12 months.10Franchise Tax Board. FTB 1024: Penalty Reference Chart A 10-partner LP that files four months late owes $720 in penalties alone, before any tax. Because the penalty runs per partner per month, larger partnerships face steeper consequences fast.
Waiver is possible when the partnership can show reasonable cause, but the bar is high. Forgetting the deadline or waiting on a partner’s information generally does not qualify. Partnerships that expect to file late are better off taking the automatic extension, which costs nothing and pushes the deadline to October 15.
Late payment of the $800 annual tax carries its own interest charges and potential penalties, separate from the Form 565 filing penalty. An LP or LLP that ignores both for several years can accumulate thousands in combined penalties, interest, and unpaid annual taxes.
Cancelling a California Partnership
The $800 annual tax keeps accruing for every year an LP or LLP stays on the Secretary of State’s rolls, even if the partnership has stopped operating.3California Legislative Information. California Revenue and Taxation Code 17935 The obligation runs until a certificate of cancellation is filed. This is the most common trap for defunct California partnerships. Owners assume the entity fades away on its own and discover years later they owe thousands in back taxes.
To formally end an LP, file a Certificate of Cancellation (Form LP-4/7) with the Secretary of State.11California Secretary of State. Certificate of Cancellation Limited Partnership LLPs use their own cancellation form. A final Form 565 must also be filed with the FTB for the last tax year, along with any remaining $800 payment. Checking the “final return” box on Form 565 tells the FTB no further returns are expected. General partnerships that never registered with the Secretary of State have no cancellation filing, but they still file a final Form 565 covering their last year of California activity.