Limited Partnerships

A limited partnership to be a partnership formed by two or more persons under the provisions of the Pennsylvania Limited Partnership statute. Unlike a general partnership, in order to create a limited partnership a certificate must be filed with the Pennsylvania Department of State. A limited partnership has one or more general partners and one or more limited partners.

Management: The management of the limited partnership is in the hands of the general partner or general partners. Limited partners are passive and have little management input.

Liability: The general partners are fully liable for the debts and obligations of the limited partnership, just as they are in a general partnership. Often the general partner is a corporation or a limited liability company rather than an individual. The limited partners are not be bound by obligations of the partnership and are at risk only to the extent of their investment.

Taxation: Continuity: In a limited partnership, the general partners usually have powers similar to those of a partner in a general partnership with regard to dissolution of the partnership. The limited partners usually have power only to cause dissolution of the limited partnership by court decree.

Transferability: The partnership agreement and the provisions of the limited partnership law and applicable securities law govern when and how a partnership interest may be transferred. The transferability is generally restricted.