Form 641 – Certificate of Conversion of a Limited Partnership Converting to a General Partnership

Jurisdiction: Country: United States | Province or State: Texas

What is a Form 641 – Certificate of Conversion of a Limited Partnership Converting to a General Partnership?

Form 641 is a filing used to officially convert a Texas limited partnership into a Texas general partnership. By filing this form with the Texas Secretary of State, you change the legal structure of your business without dissolving it and starting over.

You typically use this form when the partners decide that operating as a general partnership better fits how the business actually runs. This might be because all partners now want equal management authority and are comfortable with shared personal liability.

You would need this form if your limited partnership has at least one general partner and one or more limited partners, and you want to remove the limited liability structure. After conversion, all partners become general partners under Texas law.

Common situations include restructuring a small partnership, simplifying governance, or aligning the legal structure with how partners already share control and risk.

When Would You Use a Form 641 – Certificate of Conversion of a Limited Partnership Converting to a General Partnership?

You would use Form 641 when an existing Texas limited partnership has made a formal decision to convert into a general partnership and wants that change to be legally recognized by the state. This form applies only to conversions, meaning the business already exists and will continue operating without dissolution, but under a different legal structure. It is not used to create a new partnership or to terminate an existing one.

This filing is commonly used when limited partners no longer wish to remain passive investors and instead want full management authority. It is also used when the partnership’s operations have evolved to the point where the distinction between general and limited partners no longer reflects how the business actually functions. In these cases, continuing as a limited partnership can create unnecessary compliance burdens or confusion.

Form 641 may also be appropriate after ownership or capital structure changes, such as when limited partners are bought out, when all partners agree to share profits, losses, and decision-making equally, or when professional advice indicates that a general partnership is more suitable for tax, lending, or operational reasons. The key condition is that the partners have approved the conversion in accordance with Texas law and the partnership agreement.

Legal Characteristics of the Form 641 – Certificate of Conversion of a Limited Partnership Converting to a General Partnership

Form 641 has immediate legal significance because it is the instrument that effects the conversion under Texas law once it is filed and accepted by the Secretary of State. The conversion does not rely solely on internal agreements between partners; it occurs by operation of statute. This means the legal identity of the entity continues, but its governing framework changes.

After the conversion becomes effective, the resulting general partnership automatically succeeds to all assets, property rights, contracts, and obligations of the limited partnership. There is no need to reassign property or renegotiate existing agreements solely because of the conversion. However, the legal consequences for partners change substantially, particularly with respect to liability.

All partners become general partners upon conversion and are personally liable for partnership obligations incurred after the effective date, and in some cases for ongoing obligations as provided by law. The accuracy of the information in Form 641 and proper authorization of the filing are critical, as errors or lack of authority can expose partners to disputes, delays, or challenges to the validity of the conversion.

How to Fill Out a Form 641 – Certificate of Conversion of a Limited Partnership Converting to a General Partnership

• Start by entering the exact legal name of the limited partnership as it appears in Texas records. Do not abbreviate or modify the name. Consistency matters.
• Next, confirm the type of conversion. You will state that the entity is converting from a limited partnership to a general partnership under Texas law.
• Provide the name of the resulting general partnership. In most cases, this will be the same as the existing partnership name, unless you are changing it as part of the conversion.
• Include a statement that the conversion was approved in accordance with the partnership agreement and applicable law. You are not required to attach the agreement, but the approval must be valid.
• Enter the requested information about the filing’s effectiveness. You can choose immediate effectiveness upon filing or a delayed effective date, if allowed.
• Review the form carefully for accuracy. Errors can delay acceptance or create legal issues later.
• Sign the form using an authorized person, typically a general partner or a person authorized by the partnership. Printed name and title must be clear.
• Finally, submit the completed form to the Texas Secretary of State with the required filing fee. Once filed, keep a stamped copy with your partnership records.

Legal terms you might encounter (Form 641 – Certificate of Conversion of a Limited Partnership Converting to a General Partnership)

You may encounter the term “conversion,” which refers to a statutory process that changes an entity’s legal form without dissolving it. In this context, conversion allows a limited partnership to become a general partnership while remaining the same underlying business for most legal purposes.

Another common term is “effective date,” which is the date and time when the conversion legally takes effect. This can be the filing date or a delayed date specified in the form, subject to Texas law. The effective date matters because it determines when the new liability and management rules apply.

You may also see references to “authorized person,” meaning an individual who has legal authority to sign and file the form on behalf of the partnership. This is often a general partner or someone granted authority under the partnership agreement. “Resulting entity” refers to the general partnership that exists after the conversion, while “converting entity” refers to the limited partnership before the change. Understanding these terms helps ensure the form is completed accurately and reflects the partners’ intent.

In addition to the core terms already described, you may encounter the phrase “plan of conversion,” which refers to the internal document or agreement adopted by the partners that outlines how the limited partnership will convert into a general partnership. While Texas does not require this plan to be filed with Form 641, it is often required by the partnership agreement or by statute to evidence proper approval. The plan of conversion typically addresses how partner interests will be treated, whether any economic terms will change, and the effective date of the conversion. Maintaining a written plan can be important if the conversion is later questioned by a partner, creditor, or regulator.

Another term that can appear in discussions around Form 641 is “continuity of existence.” This concept explains that, despite the change in legal form, the entity is treated as the same business for most legal purposes. This continuity is what allows assets, contracts, and legal proceedings to carry over automatically to the resulting general partnership. Understanding this term helps partners appreciate why a conversion is often preferable to dissolving and forming a new entity, particularly when the partnership has an operating history, established relationships, or regulatory approvals tied to its existence.

You may also see references to “statutory liability” when reviewing guidance related to conversions. This refers to liability that arises by operation of law rather than by agreement. After conversion, statutory liability rules applicable to general partnerships govern the partners’ responsibilities, regardless of what prior limited partnership agreements provided. Recognizing this distinction is important, as it underscores that certain legal consequences of conversion cannot be waived or altered simply through private contracts among the partners.

In practice, you may also encounter the term “governing persons” when discussing conversions, especially in communications with banks or regulators. While Texas partnership law focuses on partners rather than officers or directors, third parties often use this term to identify individuals with authority to act on behalf of the partnership. After conversion, all partners are generally considered governing persons, which can affect how authority certifications and signature cards are completed.

Another term that often arises is “assumed name” or “DBA.” Even if the legal name of the partnership remains unchanged after conversion, the underlying legal form associated with that name has changed. Some counties and institutions treat this as a trigger to update assumed name filings or internal records. Understanding how assumed names interact with conversions can help avoid administrative gaps that might otherwise affect enforceability of contracts or payments.

You may also see references to “vesting of property by operation of law.” This phrase describes how ownership of assets automatically carries over to the resulting general partnership without deeds, assignments, or bills of sale. While no additional transfers are required, partners should still understand the concept so they can confidently explain to third parties why separate conveyance documents were not executed.

FAQs (Form 641 – Certificate of Conversion of a Limited Partnership Converting to a General Partnership)

Does filing Texas Form 641 end the limited partnership?

No. Filing Form 641 does not end the business’s existence. The conversion is designed to preserve continuity, meaning the entity continues operating without interruption while changing its legal structure under Texas law. The partnership keeps its history, assets, and ongoing operations intact.

What happens to existing contracts, leases, and agreements after the conversion?

In general, they remain in effect. The resulting general partnership typically succeeds to the limited partnership’s rights and obligations, so agreements entered into before conversion continue. However, some contracts require notice or consent when there’s a change in liability structure, so key agreements should be reviewed for any required notifications.

Do we need a new tax identification number (EIN) after converting?

Often, no—many partnerships can continue using the same federal EIN. That said, tax treatment can vary depending on the facts and how the partnership is classified for federal and state tax purposes. It’s best to consult a tax professional to confirm reporting obligations.

When does the conversion become effective?

Usually, the conversion becomes effective when the Texas Secretary of State files Form 641, unless the filing specifies a delayed effective date.

Does the conversion affect lawsuits or claims involving the partnership?

Typically, no. Ongoing litigation generally continues without interruption, with the resulting general partnership stepping into the shoes of the limited partnership. Courts usually recognize the entity’s continuity, so claims and defenses generally do not need to be refiled solely due to the conversion. However, because liability rules change, partners should understand how conversion could affect personal exposure for future claims, and consult counsel if litigation is pending or anticipated.

Do we need to update the business name, assumed name certificates, or branding?

Not always. If the partnership keeps the same legal name, additional filings may not be required. But if it operates under assumed names or plans to change its name as part of the conversion, separate filings with the Texas Secretary of State and/or county clerks may be necessary. Handling these details helps avoid confusion with customers, vendors, and regulators.

What about regulatory licenses and permits—do they still apply?

Many licenses remain valid because the entity continues to exist, but some regulators focus on liability structure or ownership classification. Agencies may require notice of the conversion or updated documentation—especially in regulated industries like construction, healthcare, or professional services. Confirming requirements after filing can prevent operational interruptions or enforcement issues.

Can partners limit personal liability after conversion through private agreements?

Partners can agree among themselves to allocate losses or indemnify one another, but these private agreements do not eliminate personal liability to third parties under Texas law. This matters when evaluating risk and deciding whether additional insurance or contractual protections are needed after conversion.

Can the conversion be reversed if circumstances change?

Not in a simple “undo” way. Texas law allows converting again into a different entity type, but it requires a new statutory process and additional filings. Because of the liability implications, converting to a general partnership should be treated as a deliberate, long-term step.

Do employees need to be notified of the conversion?

Usually, employment relationships continue uninterrupted, but notifying employees can support transparency and trust—especially if partners take a more direct management role post-conversion. In some cases, benefit providers or payroll services may also require notice or updated documentation reflecting the new legal structure.

Checklist: before, during, and after the Form 641 – Certificate of Conversion of a Limited Partnership Converting to a General Partnership

Before filing Form 641

Partners should review the partnership agreement and confirm that the conversion is properly approved under its terms and Texas law. This includes documenting partner consent and confirming who is authorized to sign and submit the filing. It is also wise to review outstanding contracts, loans, and licenses to identify any notice or consent requirements related to the change in partnership structure.

During the filing process, care should be taken to ensure the legal name of the partnership is correct, the conversion details are accurate, and the effective date is clearly stated. The form should be signed by an authorized person and submitted with the correct filing fee to avoid rejection or delay.

After Filing

The partnership should update internal records, notify banks, lenders, insurers, and key counterparties, and revise any governing documents to reflect the general partnership structure. Partners should also consider updating business registrations, permits, and professional licenses, and consult legal or tax advisors to address the new liability and compliance landscape.

Before initiating the conversion process, partners should also consider the practical business implications of becoming a general partnership, not just the legal mechanics of filing Form 641. This includes candid discussions about risk tolerance, dispute resolution, and decision-making authority. Because all partners will have management rights and personal liability, conversions are most successful when partners have aligned expectations and a clear understanding of how conflicts will be handled going forward. Documenting these expectations in a revised partnership agreement can reduce misunderstandings later.

During the conversion, partners should maintain clear records of all approvals, consents, and filings. Keeping copies of signed resolutions, the plan of conversion, and the filed Form 641 in a centralized record system can be invaluable if questions arise years later. Lenders, auditors, or prospective buyers may request evidence that the conversion was properly authorized and completed. Well-organized documentation helps demonstrate compliance and professionalism.

After the conversion, it is important to operationalize the change rather than treating it as a purely legal event. This may involve updating signature authority policies, revising internal controls, and educating partners and key employees about the new structure. For example, staff who interact with vendors or financial institutions should understand who has the authority to bind the partnership. These internal adjustments help ensure that the general partnership functions smoothly and that the legal conversion is reflected in day-to-day operations.

As part of pre-conversion planning, partners should consider whether existing insurance policies remain appropriate once the partnership becomes a general partnership. Policies obtained while operating as a limited partnership may assume a different risk profile, and insurers may require endorsements or policy changes. Reviewing coverage before filing Form 641 can prevent gaps that might otherwise arise immediately upon conversion.

During the filing

Partners should also think about internal communications. Aligning partners on messaging to employees, customers, and vendors can help present the conversion as an intentional and positive change rather than a source of uncertainty. Even a brief written explanation can reduce confusion and reinforce confidence in the partnership’s leadership.

After the conversion, partners should schedule a follow-up review within a few months to confirm that all intended updates were completed. This includes verifying that financial institutions have updated authority records, that accounting practices reflect the new structure, and that no overlooked filings remain outstanding. Treating this review as part of the checklist helps ensure the conversion is fully implemented rather than partially completed.

Common mistakes to avoid (Form 641 – Certificate of Conversion of a Limited Partnership Converting to a General Partnership)

• A common mistake is assuming that internal agreement among partners is enough to complete the conversion. Without filing Form 641, the conversion is not legally effective under Texas law, even if all partners agree in writing.
• Another frequent error is listing an incorrect or inconsistent entity name that does not exactly match state records. This can result in rejection of the filing or future disputes about the entity’s legal status. Failing to obtain proper authorization from partners or having the form signed by someone without authority can also undermine the validity of the conversion.
• Some partnerships overlook the significance of the effective date and do not plan for when personal liability rules change. Others fail to notify lenders or contractual partners, which can lead to defaults or strained business relationships. Avoiding these mistakes requires careful review, clear partner communication, and attention to detail when preparing and filing the form.
• Another mistake to avoid is underestimating the personal liability implications of converting to a general partnership. Some partners focus on the simplicity of the structure and overlook the fact that, after conversion, each partner can be personally liable for obligations incurred in the ordinary course of business. Failing to reassess insurance coverage, indemnification arrangements, or risk management practices can leave partners exposed in ways they did not anticipate while operating as a limited partnership.
• Partnerships sometimes also make the error of assuming that all third parties will automatically recognize the conversion without notice. While the law provides for continuity of the entity, banks, insurers, and contractual counterparties often rely on their own records. If those records are not updated, transactions can be delayed or rejected. Proactively communicating the conversion and providing evidence of the filed Form 641 helps avoid operational disruptions.
• Finally, a subtle but important mistake is neglecting to coordinate the conversion with tax reporting and accounting practices. Even when the federal tax classification remains the same, changes in partner roles and liability can affect how income, losses, and distributions are documented internally. Misalignment between legal structure and accounting records can create confusion during audits or when preparing tax returns. Ensuring that financial professionals are informed of the conversion helps maintain consistency and compliance.
• Another mistake is failing to update the signature authority and internal approval processes after the conversion. In a limited partnership, authority is often concentrated in the general partner, but after conversion, authority may be shared more broadly. If internal practices do not reflect this shift, the partnership can experience delays or disputes when entering into contracts or approving expenditures.
• Some partnerships also assume that conversion automatically resolves governance tensions that existed under the limited partnership structure. In reality, converting to a general partnership can amplify unresolved disagreements because all partners now have equal management rights. Proceeding without addressing these issues can lead to operational friction or even deadlock.
• A further error is neglecting to consider how the conversion affects personal financial planning for partners. Personal guarantees, estate plans, and asset protection strategies may have been structured around limited liability assumptions. Ignoring these downstream effects can expose partners to unintended risks that could have been mitigated with advance planning.

What to do after filling out the Form 641 – Certificate of Conversion of a Limited Partnership Converting to a General Partnership

1. Once Form 641 has been filed, the partnership should verify that the Texas Secretary of State has accepted the filing and obtain a stamped or certified copy for its records. This confirmation is important because it serves as proof of the conversion and may be requested by banks, lenders, insurers, or other third parties that need evidence of the entity’s current legal status.
2. After confirmation, the partners should implement the conversion in practice by updating governing documents, internal records, and financial arrangements to reflect that the business is now a general partnership. This includes revising partnership agreements, updating bank account authorizations, and ensuring accounting systems and insurance policies align with the new liability structure. Key stakeholders such as creditors, landlords, and major vendors should be notified to avoid confusion or compliance issues.
3. The final step is to assess the ongoing legal, financial, and tax implications of operating as a general partnership. Because all partners now share management authority and personal liability, it may be necessary to reevaluate risk management strategies, insurance coverage, and compliance practices. Ongoing coordination with legal and tax advisors can help ensure the partnership remains compliant and that partners understand their rights and responsibilities going forward.
4. After the conversion, partners should also take time to revisit their long-term business strategy in light of the new general partnership structure. The increased personal exposure that comes with general partnership status often prompts discussions about growth plans, financing, and exit strategies. For example, lenders may evaluate creditworthiness differently when partners are personally liable, and partners may want to formalize contribution or reimbursement arrangements to address unequal financial commitments.
5. It is also prudent to review and, if necessary, update dispute resolution mechanisms after the conversion. General partnerships rely heavily on trust and cooperation, and disagreements can have more direct personal consequences. Including clear provisions for mediation, arbitration, or buyout rights in an updated partnership agreement can provide a roadmap for resolving conflicts without jeopardizing the business or personal relationships among partners.
6. Finally, partners should treat the filing of Form 641 as the beginning of an ongoing compliance responsibility rather than the end of the process. Regular legal and financial check-ins can help ensure that the partnership remains aligned with Texas law and that partners understand their evolving obligations. As the business grows or circumstances change, periodic review of the partnership structure can help determine whether the general partnership continues to serve the partners’ goals or whether future restructuring may be appropriate.
7. After the conversion is complete, partners should also consider how the change may affect external perceptions of the business. Some customers, lenders, or investors associate general partnerships with smaller or more closely held operations. Being prepared to explain the rationale for the conversion and how the partnership manages risk can help maintain confidence among key stakeholders.
8. It can also be useful to calendar periodic compliance and governance reviews following the conversion. While general partnerships have fewer formal filing requirements than limited partnerships, ongoing attention to agreements, authority, and liability exposure remains essential. Regular reviews help ensure that informal practices do not drift away from what partners originally intended when they approved the conversion.
9. Finally, partners should document lessons learned from the conversion process itself. Understanding what worked smoothly and what caused delays can be valuable if the partnership considers future restructuring or expansion. This institutional knowledge supports better decision-making and reinforces a disciplined approach to managing legal and structural changes over the life of the business.