A limited partnership is a form of business ownership that consists of general partners and limited partners. There is no maximum number of either type of partner, but there must be at least one general partner.

The managing general partner manages the partnership and is typically personally liable for all of the partnership's obligations, as well as for the acts of the other partners on behalf of the partnership.

Additional general partners delegate management of the partnership to the managing general partner, but are also personally liable for all of the partnership's obligations. Limited partners are generally exposed to such liability only to the extent of their investment in the limited partnership.

However, they are not permitted to participate in management of the partnership without the loss of this liability protection. A limited partnership offers some flexibility when allocating profits and control. This flexibility can provide certain tax and business advantages for individual partners.

The Documentation Involved with a Partnership Investment

Confidential Private Placement Memorandum of Partnership: This document contains the detailed information explaining the business structure, ownership analysis, and the dynamics for the Limited partnership. This includes the partnership structure and its filing details, the cash flow from the initial investment to the partnership termination, Risk factors, Tax ramifications, and legal controls.

Partnership Agreement: This document is the structural analysis of the Limited Partnership, the functional guidelines for its operation, and the legal obligations of all the participants from the general partner to the limited partners.

Subscription Agreement: This document is the application form for the limited partnerís participation, including the accredited investor declaration, and the acceptance by the general partner as to the accredited investment.