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Limited Partnership

Limited Partnership Lawyer California

A limited partnership is a special form of partnership which has two tiers of partners – general partners who manage the business and limited partners who are passive investors in the business. 

The general partners function just like partners in a partnership.  The general partners manage the partnership on behalf of the limited partner and have personal liability for the debts and judgments against the limited partnership.  The limited partners are very much like shareholders of a corporation in that they are investors who do not have a management role in the limited partnership, and vote only on extraordinary business decisions, such as selling most of the limited partnership assets, electing or removing general partners, or dissolving the limited partnership.   Unlike the general partners, the limited partners have limited liability so they are not liable for the debts of the limited partnership, but they must be careful not to become involved in the management of the limited partnership, act on behalf of the limited partnership, or to represent themselves as general partners, because this type of conduct may cause them to lose their limited liability.

A limited liability company needs to be formed by registering it with the secretary of state by filing a Certificate of Limited Partnership.  Typically the limited partnership is either a brand new business that wants to function as a limited partnership or a partnership that wishes to covert into a limited partnership.  Each limited partnership should have a Limited Partnership Agreement which clearly addresses the relations among the general and limited partners, initial and additional contributions to the partnership, voting powers, profit and loss distribution, management powers and responsibilities of the general partners, and transferability of limited partnership interests.  

Limited partnership is an interesting hybrid between a partnership and a corporation.  Even though the general partners are still personally liable for limited partnership liabilities, a general partner can be a limited liability company or a corporation, which would in turn shield the general partner from personal liability albeit at the cost of additional complexity.  Limited partnerships are more attractive to investors than regular partnerships because of limited liability given to limited partners.  Those desiring a loose and informal partnership structure, combined with the ability to attract passive investors, often chose to do business as limited partnerships.

Limited Partnership Attorney in San Francisco

Our San Francisco limited partnership lawyers at the Zurada Law Group are just a phone call away at 415-637-8483. We are experienced Limited Partnership lawyers in California. For a FREE consultation call us or just fill out our contact form on the right hand side of your screen.

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