CHAPTER 4 LIMITED PARTNERSHIP (n) Art. 1843.

A limited partnership is one formed by two or more persons under the provisions of the following article, having as members one or more general partners and one or more limited partners. The limited partners as such shall not be bound by the obligations of the partnership. Art. 1844. Two or more persons desiring to form a limited partnership shall: (1) Sign and swear to a certificate, which shall state (a) The name of the partnership, adding thereto the word"Limited"; (b) The character of the business; (c) The location of the principal place of business; (d) The name and place of residence of each member, general and limited partners being respectively designated; (e) The term for which the partnership is to exist; (f) The amount of cash and a description of and the agreed value of the other property contributed by each limited partner; (g) The additional contributions, if any, to be made by each limited partner and the times at which or events on the happening of which they shall be made; (h) The time, if agreed upon, when the contribution of each limited partner is to be returned; (i) The share of the profits or the other compensation by way of income which each limited partner shall receive by reason of his contribution; (j) The right, if given, of a limited partner to substitute an assignee as contributor in his place, and the terms and conditions of the substitution; (k) The right, if given, of the partners to admit additional limited partners; (l) The right, if given, of one or more of the limited partners to priority over other limited partners, as to contributions or as to compensation by way of income, and the nature of such priority; (m) The right, if given, of the remaining general partner or partners to continue the business on the death, retirement, civil interdiction, insanity or insolvency of a general partner; and (n) The right, if given, of a limited partner to demand and receive property other than cash in return for his contribution. (2) File for record the certificate in the Office of the Securities and Exchange Commission. A limited partnership is formed if there has been substantial compliance in good faith with the foregoing requirements. Art. 1845. The contributions of a limited partner may be cash or property, but not services. Art. 1846. The surname of a limited partner shall not appear in the partnership name unless: (1) It is also the surname of a general partner, or (2) Prior to the time when the limited partner became such, the business has been carried on under a name in which his surname appeared. A limited partner whose surname appears in a partnership name contrary to the provisions of the first paragraph is liable as a general partner to partnership creditors who extend credit to the partnership without actual knowledge that he is not a general partner.

A "limited partnership" limits the responsibility for debts beyond the investment to the managing "general partners. being a contractor or employee of a general partner. Like a general partnership. Except where a conflict exists. Generally. contributes services to the partnership. the certificate must state the date on which the limited partnership will dissolve. Although one partner may be both a limited and a general partner. limited partnerships must file a certificate with the appropriate state authority to form and carry on as a limited partnership. Accordingly. The contents of the certificate. A limited partner may lose protection against personal liability if she or he participates in the management and control of the partnership. however. but within a sufficient time before the statement was relied upon to enable him to cancel or amend the certificate. however. or knowingly allows her or his name to be used in partnership business. . however. If a limited partner is engaged solely in one of the activities defined as a safe harbor. In addition. "safe harbors" exist in which a limited partner will not be found to have participated in the "control" of the partnership business. A limited partnership must have one or more general partners who manage the business and who are personally liable for partnership debts. 1847. acts as a general partner. the extent of liability for a limited partner is the limited partner's capital contributions to the partnership. A Llimited partnership is similar in many respects to a general partnership. will be subject to applicable state law. Generally. one who suffers loss by reliance on such statement may hold liable any party to the certificate who knew the statement to be false: (1) At the time he signed the certificate. Unlike general partnerships. a certificate of limited partnership includes the limited partnership's name. and because the limited partnership has a set term of duration. a limited partnership may govern its affairs according to a limited partnership agreement. For this reason. or winding up the limited partnership. then he or she is not considered a general partner with the accompanying potential liability. with one essential difference." The investing "limited partners" cannot participate in management and are limited to specific percentages of profit. Limited partnerships are frequently used in real estate and entertainmentrelated transactions. and other states have relied on either revision to the uniform act or on both revisions to the uniform act. however. at all times there must be at least two different partners in a limited partnership. or (2) Subsequently. Safe harbors include consulting with the general partner with respect to partnership business. the law of general partnerships applies equally to limited partnerships. If the certificate contains a false statement. However. depending on which uniform limited partnership act the state has adopted. and the names and addresses of general partners and limited partners. the character of the limited partnership's business. limited partnerships are often used to provide capital to a partnership through the capital contributions of its limited partners. will vary from state to state. Such an agreement.Art. Unlike a general partnership. A partner who has such limited participation is considered a "limited partner" and does not generally incur personal liability for the partnership's obligations. or to file a petition for its cancellation or amendment as provided in Article 1865. a few states have retained the old uniform act. a limited partnership has one or more partners who cannot participate in the management and control of the partnership's business. States have for the most part relied on the Uniform Limited Partnership Act in adopting their limited partnership legislation. The Uniform Limited Partnership Act was revised in 1976 and 1985. The limited partnership did not exist at Common Law.

Sign up to vote on this title
UsefulNot useful