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LIMITED PARTNERSHIP CHARACTERISTICS

:

1. Formed by compliance with statutory requirements
2. One or more general partners control the business
3. One or more general partners contribute to the capital and share in the profits but do
not participate in the management of the business and are not personally liable fo
partnership obligations beyond their capital contributions
4. May ask for the return of their capital contributions under conditions prescribed bylaw
5. Partnership debts are paid out of common fund and the individual properties of
general partne



LIM
PersonaIIy IiabIe for partnership obIigations
O Liability extends only to his capital contributions
O When manner of mgt. not agreed upon, all general partners have an equal
right in the mgt. of the business
O No participation in management
O Contribute cash, property or industry
O Contribute cash or property only, not industry
O Proper party to proceedings by/against partnership
O Not proper party to proceedings by/against partnership
O Ìnterest not assignable w/o consent of other partners
O Ìnterest is freely assignable
O Name may appear in firm name
O Name must appear in firm name
O Prohibition against engaging in business
O No prohibition against engaging in business
O Retirement, death, insolvency, insanity of general partner dissolves partnership
O Does not have same effect; rights transferred to legal representative






DIFFERENCES BETWEEN GENERAL AND
LIMITED PARTNER/PARTNERSHIP
GENERAL
REQUIREMENTS FOR FORMATION OF LIMITED PARTNERSHIP:

1. Certificate of articIes of the Iimited partnership must state the ff. matters:
a.Name of partnership + word "ltd."
b.Character of business
c. Location of principal place of business
d. Name/place of residence of members
e. Term for partnership is to exist
f. Amount of cash/value of property contributed
g. Additional contributions
h. Time agreed upon to return contribution of limited partner
i. Sharing of profits/other compensation
j.Right of limited partner (if given) to substitute an assignee
k.Right to admit additional partners
l.Right of limited partners (if given) to priority for contributions
m.Right of remaining gen partners (if given) or continue business in case of death,
insanity, retirement, civil interdiction, insolvency
n.Right of limited partner (if given) to demand/receive property/cash in return for
contribution

2. Certificate must be fiIed with the SEC
WHEN GENERAL PARTNER NEEDS CONSENT/RATIFICATION OF ALL LIMITED
PARTNERS:
1. Do any act in contravention of the certificate
2. Do any act which would make it impossible to carry on the ordinary business of the
partnership
3. Confess judgment against partnership
4. Possess partnership property/assign rights in specific partnership property other than
for partnership purposes
5. Admit person as general partner
6. Admit person as limited partner - unless
authorized in certificate
7. Continue business with partnership property on death, retirement, civil interdiction,
insanity or insolvency of gen partner unless authorized in certificate



SPECIFIC RIGHTS OF LIMITED PARTNERS:
1.Right to have partnership books kept at principal place of business
2.Right to inspect/copy books at reasonable hour
3. Right to have on demand true and full info of all things affecting partnership
4. Right to have formal account of partnership affairs whenever circumstances render it
just and reasonable
5. Right to ask for dissolution and winding up by decree of court
6. Right to receive share of profits/other compensation by way of income
7. Right to receive return of contributions provided the partnership assets are in excess
of all its liabilities

REQUISITES FOR RETURN OF CONTRIBUTION OF LIMITED PARTNER:
1. All liabilities of partnership have been paid/if not yet paid, at least sufficient to
coverthem
2. Consent of all members has been obtained
3. Certificate is cancelled/amended as to seorth withdrawal /reduction of contribution
LIABILITIES OF A LIMITED PARTNER

To the partnership1.for the difference between his contribution as actually made and
that stated in the certificate as having been made, and
2. for any unpaid contribution which he agreed in the certificate to make in the future
time
As a trustee for the partnership
1. For the specific property stated in the certificate as contributed by him but which he
had not contributed;
2. For the specific property of the partnership which had been wrongfully returned to
him; and
3. Money or other property wrongfully paid or conveyed to him on account of his
contribution.
DISSOLUTION OF LIMITED PARTNERSHIP
(Priority in Distribution of Assets):
1.Those due to creditors, including limited partners
2.Those due to limited partners in respect of their share in profits/compensation
3.Those due to limited partners of return of capital contributed
4.Those due to general partner other than capital & profit
5.Those due to general partner in respect to profits6.Those due to general partner for
return of capital contributed

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