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Characteristics of<br />
Limited Partnerships<br />
� A limited partnership is composed of at least one general partner, and of at<br />
least one limited partner. The formation of the partnership requires filing<br />
certain documents (typically with the state’s Secretary of State).<br />
� The death of a limited partner does not cause the dissolution of the<br />
partnership, and limited partnership shares are often transferable. Limited<br />
partners may have restricted voting rights.<br />
� The general partner is personally liable to creditors. However, some states<br />
allow the general partner to be a corporation. This allows both unlimited life<br />
to the partnership, and limited liability to all the people involved.<br />
� According to RULPA (Uniform Limited Partnership Act (1976), which<br />
replaced ULPA (1916)) §303(a), limited partners are liable only to the extent<br />
of their contributions, unless:<br />
� They are also general partners<br />
� They exercised control or had a right to exercise control – in such case, they are<br />
liable only to persons who reasonably believed, based on the limited partner’s<br />
conduct, that the limited partner is a general partner).<br />
(c) 2004 264
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