Limited Partnerships are partnerships with:
1. one or more “limited” partners who do not participate in the control of the business and are not personally liable for the obligations of the partnership; and
2. one or more “general” partners who actively engage in the control of the business and are personally liable for the obligations of the corporation.
Unlike a general partnership, a Certificate of Limited Partnership must be filed with the secretary of state, together with a filing fee of $70.00. Like a general partnership agreement, the agreement of a limited partnership should be drafted to completely set forth the structure and business of the partnership.
Only the general partners manage the partnership. This structure lends itself to centralized management (complete management in the hand of few persons). If a limited partner engages in the management of the partnership, he risks the loss of his limited liability protection. The term “limited liability” means that the partner is liable only up to the amount of his capital contribution. General partners are agents of the partnership and can bind the company, while limited partners do not have the apparent authority to bind to the partnership. The assignment, death, bankruptcy or withdrawal of a limited partner will not cause the dissolution of a limited partner, although the same rules of continuity which apply to general partnership dissolution typically applies to the general partners of limited partnerships. In most other ways, limited partnerships are similar to general partnerships.