The Essence of Limited Partnership
If you think that marriage was a difficult relationship to enter into and maintain, you have obviously not experienced the turbulent waters of a business relationship. Born from necessity, there is now a web presence of a company that seeks to bring business partners together.
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. The goal is not to double your effort but to take advantage of the much-needed skills and knowledge that someone brings to your business which you lack. Somebody may be a whiz at computer programming, but if she or he lacks that go-getter attitude that you have, then this match will not flourish.
Age works two ways. While it is tempting to hook up with a business partner who is of similar age as you, do not limit yourself. Understand that taking on a partner is not a guarantee for business success. Instead, it is a way of stacking the odds in your favour! When it comes to business settings, there are different kinds.
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 primary respects, in similar position as great partners in a conventional company, especially when they have a management control, some unique share of the right to use the partnership property, have joint and several liability for the debts of the partnership, and share the profits of the firm in predefined proportions.As in a general partnership, the general partners have an authority, as the agents of the company, to bind the contracts in partnership with the third parties that are in the typical course of the business of the partnership.
Background of limited liability in limited partnership
Like shareholders in a certain corporation, the limited partners in a limited partnership also 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 delivers the limited partners some good return on their investments (the same goes to a dividend), and the extent and nature of which is typically defined in partnership agreement. General Partners will tend to bear more economic risk compared to the limited partners, and if there is great financial loss, the general partners will be the ones liable.
Limited partnership interests are afforded a considerable level of protection and safety through the charging order mechanism.