Limited Partnership

B. Filing with the state is required 

1. Filing with the State is required 

Like an LLP and a corporation, a limited partnership can be formed only pursuant to a state statute and only by filing a certificate with the state.

2. Contents of the filing document 

Most states required the certificate of Limited partnership to include the following :

a. A statement that the entity is a Limited Partnership. The name must contain the words " limited partnership" or the abbrevuation "Ltd."

b. The name of the agent for service of process and the address of the office.

c. The name and business sddress of each general partner.

d. The latest date upon which the limited partnership is to dussolve.  

C. Operation of a limited partnership

1. Limited partner dose not manage

Limited partners have no right to take part in the day-to-day management of their limited partnership.

2. Limited partner is not an agnet

A limited partner is not an agnet of the partnership. Thus, a limited partner has no authority to enter into contracts on behalf of the partnership.

D. Termination of a limited partnership 

A limited partnership may be dissolved by :

a. The occurrence of the time or event stated in the partnership agreement.

b. Written consent of all general partners.

c. Withdrawal or death of a general partner.

d. Judicial decree. 

Limited Partnership

2. Nature, Formation, Operation, and Termination of Limited Partnership

A. Nature of a limited partnership

1. Generally no parpetual life
General, a limited partnership does not have a perpetual life, uuneless the partnership agreement provides otherwise.

2. Similar to corporation
A limited partnership cab be formed only pursuant to a state statute an only by filing a certificate with the state.

3. General Partners
A general partner is personally liable for all partnership debts.

4. Limited Partners
a. A limited partner's liability is limited to his investment and unpaid capital contributions.
b. Limited partners' names cannot be idenified with the business.
c. Limited partners must not participate in management.
d. A new partner can be added only upon the consent of all partners.
e. A limited partner does not owe a fiduciary duty to the limited partnership or to the general partners.

Limited Partnership

1. Advantages, Implications, and Constraints of Limited Partnerships.

A. General partner has personal liability

There must at least one general partner in a limited partnership, and that general partner has full personal liability for all partnership debts. The general partner also has most management rights.

B. Unanimous consent required to sell

Like partners in other partnerships, neither a general partenr nor a limited partner can sell the right to be a partner in the limited partnership without the unanimous consent of the other partners. However, a limited partner may sell or assign his partnership interest (share of profits) without the consent of the other partners.

C. Choice as a business entity

This form of business entity offers limited liability to most investors, centralized management, and the flow-through tax advantages of a partnership, without the limitation on number of investors that an S corporation has. Its disadvantage, however, is that at last one person must be personally liable for the debts of the business.

Limited Liability Partnership (LLP)

A limited liability partnership (LLP) is similar to a general partnership in most respects, including the sharing of profits and losses, and generally all of the advantages and disadvantages of a general partnership mentioned above apply to a limited partnership.

A. Difference : Partner In An LLP Not Personally Liable.
1. Not generally personally liable for acts of follow partners, employees or agents.
2. Liable for their negligence and negligence of those under their direct control.
3. Generally not personally liable for debts and contractual obligations.

B. Difference : Formation
1. LLP must file with the state.
2. Contents of certificate of limited liability Partnership.
3. Partnerships may convert to LLP.
4. A general partner who is personally liable is not usually required.