The Essence of Limited Partnership
The idea of matching up with compatible business partners will eventually hit the majority of entrepreneurs. Imitators soon followed, and at this point, there is no shortage of websites that will help the aspiring entrepreneur to hook up and partner up with others who will be able to get a business up and to grow.
Caution is still the need of the hour, and just like dating sites will seek to match you up with the potential spouse of your dreams, a failure to be honest and open with your wants and needs and a lack of a good dose of gut level common sense can still set you up for failure. Your potential business partners should have a skill set and also relevant work or business experience that complements you and your business since enthusiasm is not enough to make the cut. The personality conflicts will prevent a harmonious work relationship.
Do not blindly jump into a business relationship but get to know the person, their goals and ambitions, and also their shortcomings. A younger person will bring an enthusiasm which you might be lacking although you might not know it while an older individual will bring life experience and years of business which you have not been able to have. There are different kinds of business set ups.
A limited partnership is a type of partnership, but the difference is that a general partnership should have at least 2 general partners, and a single limited partnership should have one general partner and one limited partner.
The general partners are, in all respects, has a similar position in great partners in a company, especially when they have unique share of the right to use a partnership property, a management control, joint and several liability for the debts, and share the profits of the company at fair proportions.As in a general partnership, the general partners have an authority, as the agents of the company, to bind certain contracts in a partnership with the third parties that are involved in the business of the partnership.
Defining limited partnership
Same goes to the shareholders in a specific corporation, limited partners in a limited partnership have limited liability. In other words, the limited partners have zero management authority, and are not liable for the debts of such partnership (unless they have obligated themselves by another contract such as the guaranty). The limited partnership presents the limited partners a considerable return on their investments like a dividend, and the extent and nature of which is stated in partnership agreement. Not like the limited partners, general partners will suffer more economic risks and if there is a loss of profit, the general partners will be liable.
Limited partnership are subject to the same kind of alter-ego piercing principles since corporate shareholders.