VIEWS: 91,216 PAGES: 11 CATEGORY: Creating a Partnership Agreement POSTED ON: 7/17/2009
This Limited Partnership Agreement creates a limited partnership, and describes the rights and responsibilities of the general partners and the limited partners. In limited partnerships, the general partners actively manage the affairs of the business, share the profits in predefined proportions, and are jointly and severally liable for the partnership's debts. The limited partners are passive investors and have no role in management. This document contains numerous standard provisions that are commonly found in limited partnership agreement and may be customized to fit the specific needs of the individuals. It can be used by individuals who wish to create a limited partnership, or who wish to modify an existing limited partnership.
Agreement of Limited Partnership Template This agreement governs the rights and responsibilities of limited partners and general partners in a limited partnership. Limited partners are considered passive investors since they retain limited liability but are not allowed to exert any control over the partnership. Customize the information of the partners, their capital contribution, ownership percentage, rights and responsibilities, and more. This agreement is ideal for individuals or small businesses that want to specify the duties and obligations of each partner in a limited partnership. LIMITED PARTNERSHIP AGREEMENT This Agreement of Limited Partnership (the “Agreement”) is entered into and effective as of this _____________ day of __________________, 20___________ by and between _________________ (the “General Partner”) and __________ (the “Limited Partner”). RECITALS The General Partner and the Limited Partner wish to enter into this Agreement and form a limited partnership pursuant to the provisions of the _______________________________________ Act (the “Act”) for the purpose of ________________________________________________, in accordance with the terms of this Agreement. NOW THEREFORE, in consideration of the premises and the mutual promises and covenants herein contained, the parties agree that: 1. FORMATION (a) Partnership Formation The General Partner and the Limited Partner hereby form a limited partnership (the "Partnership") pursuant to the provisions of the Act. (b) Purpose The purpose of the Partnership is to _______________________________________. The Partnership shall not engage in any other business or activity. (c) Name The business of the Partnership shall be carried under the name __________________________. The Partnership will conduct all business only under this name. (d) Organization Certificates As promptly as practicable after the execution of this Agreement the General Partner shall file: (i) Certificate of Limited Partnership in the office of the Secretary of State of _________________ in connection with the Act; (ii) All such other certificates, notices, statements, or other instruments required by law for the formation and operation of the Partnership. © Copyright 2013 Docstoc Inc. 2 (e) Principal Place of Business The principal place of business of the Partnership shall be located at ______________________________________________, or such other locations as the General Partner may, from time to time, determine by giving notice in writing to the Limited Partner. The Partnership may have such additional offices at any other places as the General Partner may in its discretion deem it necessary or advisable. 2. TERM OF THE PARTNERSHIP The Partnership shall commence on the date of this Agreement shall continue in full force and effect until ___________________, unless otherwise sooner terminated pursuant to the provisions of this Agreement. 3. PROFITS AND LOSSES SHARING PERCENTAGES The profits and losses sharing percentages of the Partners shall be: GENERAL PARTNER ________% LIMITED PARTNER ________% The term “profits” shall mean any income or gain of whatsoever kind actually incurred by the Partnership or which, because of generally accepted accounting procedures, must be deemed to have been incurred by the Partnership. The term “losses” shall mean any deduction, expenditure, or charge actually incurred by the Partnership or which, because of generally accepted accounting procedures, must be deemed to have been incurred by the Partnership. 4. CAPITAL CONTRIBUTIONS OF PARTNERS The capital contributions of the Partners shall be as follows: (a) GENERAL PARTNER $ __________ (b) LIMITED PARTNER $ _________ (“Capital Contribution”) Upon execution and delivery of this Agreement the General Partner and Limited Partner shall contribute the said Capital Contribution, in cash, to the capital of the Partnership. No assessments of additional contributions shall be required of the Partners. Neither the General Partner nor Limited Partner shall be entitled to interest of any kind on any Capital Contribution or on such Partner's Capital Account. © Copyright 2013 Docstoc Inc. 3 5. ADDITIONAL LIMITED PARTNERS The General Partner may admit one or more additional Limited Partners to the Partnership in accordance with the terms of this Agreement. Such additional Limited Partners shall be admitted to the Partnership only with the consent of the Limited Partner. The Capital Contributions of all such additional Limited Partners shall be made in cash. 6. CAPITAL ACCOUNTS Capital accounts will be maintained for both General Partner and Limited Partner. This Capital Account shall show the capital contribution of a partner, plus profits and minus losses and distributions (“Capital Account”). The Capital Account shall be adjusted in the following manner: (a) The Capital Account of each partner shall be increased by the amount of capital contribution to the Partnership and the amount of net income or profits derived from operations of the Partnership. (b) The Capital Account of each Partner shall be decreased by any amount of losses from operations and all amounts of money and the fair market value of property paid or distributed to such Partner. 7. DETERMINATION OF INCOME AND LOSS. At the end of each fiscal year, and at any other time the General Partner deems appropriate, each item of Partnership income, expense, gain, loss and deduction shall be determined for such period and shall be allocated among the partners in accordance with their sharing percentages. 8. DISTRIBUTIONS OF CASH PROCEEDS The cash proceeds may be distributed by the General Partner to all Partners in the same ratio as profits and losses are shared. (a) Cash distributions from the Partnership may be made by the General Partner to all Partners upon payment of all debts as and when they mature. (b) The General Partner shall determine when, any cash distributions shall be made to the Partners, pursuant to the provisions of this Agreement. (c) There shall be no obligation on the Company to return to the General Partner or the Limited Partners, any part of their capital contributed to the Partnership, for so long as the Partnership continues in existence. (d) No General or Limited Partner shall be entitled to any priority or preference over any other Partner as to cash distributions. © Copyright 2013 Docstoc Inc. 4 (e) No interest shall be paid to any Partner on the contributions to the capital of the Partnership or on any subsequent contributions of capital. 9. OPERATION OF PARTNERSHIP The General Partner shall get reimbursement of all reasonable expenses incurred by him on behalf of the Partnership. All costs and charges incurred for obtaining any outside professional services, for the Partnership business, including legal fees and any independent accounting and auditing fees and fees incurred in connection with preparing Partnership federal income tax returns, shall be charged to the Partnership by General Partner in accordance with generally accepted accounting procedures and practices. 10. ACCOUNTING (a) Books The General Partner shall keep: (i) adequate books and records showing in detail all financial activities of the Partnership on the accrual basis of accounting, and (ii) all records required under the Act to be kept by the Partnership. All such books and records shall be available for inspection audit by any Limited Partner or his duly authorized representative during business hours at the principal office of the Partnership upon reasonable advance notice. (b) Furnishing of Financial Statements The General Partner shall furnish to the Limited Partner an annual report containing a balance sheet and income statement for such year, and any other information necessary for preparation of such Limited Partner's federal income tax return. (c) Filing of Tax Returns The General Partner shall cause the Partnership to file a federal partnership income tax return and all other tax returns required to be filed by the Partnership for each fiscal year. 11. RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS (a) Management The Limited Partner will not be entitled to exercise any right, power, or authority to participate in the management or general affairs of the Partnership or to bind the Partnership in any manner whatsoever. © Copyright 2013 Docstoc Inc. 5 (b) Liability The Limited Partner shall not have any personal liability whatever in his capacity as a Limited Partner, whether to the Partnership, to any Partner, for debts, liabilities, contracts or other obligations of the Partnership, or for any losses of the Partnership, beyond the capital contribution made by such Limited Partner to the capital of the Partnership. (c) TRANSFERABILITY The interest of the Limited Partner may not be transferred without the express written approval of the General Partner. 12. POWERS, DUTIES of GENERAL PARTNER (a) MANAGEMENT The General Partner shall have full, exclusive and complete rights and powers in the management and control of the business and affairs of the Partnership. The General Partner agrees to conduct the business and operations of the Partnership in a careful and prudent manner and in accordance with good industry practice. The General Partner shall devote sufficient time as is reasonably needed to manage the business of the Partnership. (b) Rights General Partner shall have the rights and powers to perform all acts which in its judgment are necessary or desirable to carry out the Partnership's business including without limitation the following acts: (i) to purchase or to acquire, own, lease, manage any property or to make any investment and reinvestment any funds of the Partnership in such property; (ii) to employ any agents, employees, independent contractors, brokers, attorneys and accountants services to assist in or take responsibility for the management of the Partnership's business; (iii) to borrow any necessary money or funds from any lending institution or partner or other person and, in connection therewith, to issue notes, or any other evidence of indebtedness and as security therefore; to mortgage or otherwise encumber any or all of the assets or property of the Partnership; (iv) to commence or defend any litigation with respect to the Partnership and to compromise, settle, arbitrate, or otherwise adjust claims in favor of or against the Partnership (v) to insure property, assets of the Partnership against any and all risks relating to the business of the Partnership; © Copyright 2013 Docstoc Inc. 6 (vi) to sell, with or without notice, at public or private sale, and to exchange, trade, transfer, assign, convey, lease or grant options for any and all property or assets of the Partnership; (vii) to make any investments in government obligations, bank certificates of deposit, short- term debt securities, and short-term commercial paper pending investment or reinvestment of funds of the Partnership or to provide funds from which to meet contingencies; and (ix) to do all such other acts and things and engage in all such proceedings, and to execute, acknowledge, seal and deliver all documents or instruments, as the General Partner may deem necessary or desirable to carry out the business of the Partnership, all at such price and other terms as the General Partner deems proper. (c) COMPENSATION The General Partner shall receive a fees of $ ________________________ per month for services rendered by the General Partner. (d) Presumption of Power Any contracts or agreements executed by the General Partner in relation to the Partnership business shall be sufficient to bind the Partnership. The General Partner or any person dealing with the General Partner shall be required to determine his authority to make or execute any undertaking on behalf of the Partnership, unless and until such persons have received written noticed to the contrary. (e) Limitations The General Partner shall exercise ordinary business judgment in managing the affairs of the Partnership unless fraud, deceit, or a wrongful taking shall be involved, the General Partner shall not be liable or obligated to the Limited Partners for any mistake of fact or judgment made by the General Partner in operating the business of the Partnership resulting in any loss to the Partnership or its Partners. (f) Indemnification The General Partner shall not be liable, responsible or accountable to the Partnership or the Limited Partner for any damages or for any act or omission on part of the General Partner unless such act or omission was performed or omitted fraudulently or with gross negligence or in bad faith. Partnership shall indemnify and hold harmless the General Partner from and against any loss, expense, damage or injury suffered or sustained by reason of any acts, omissions or alleged acts or omissions arising out of his or its activities on behalf of the Partnership or in furtherance of the interests of the Partnership. (g) Transferability © Copyright 2013 Docstoc Inc. 7 The interest of the General Partner may not be transferred without written approval from the Limited Partner. 11. PROHIBITED TRANSACTIONS Neither the General Partner nor the Limited Partners shall (a) Use the name of the Partnership, or any other similar name, or any trademark or trade name adopted by the Partnership, except in the ordinary course of the Partnership's business; (b) Disclose to any third person or entity any of the Partnership business practices, trade secrets, or any other information not generally known to the business community; (c) Do any act with the intention of harming the business operations of the Partnership; (d) Do any act contrary to this Agreement, except with the prior expressed approval of all partners; (e) Do any act which would make it impossible to carry on the intended or ordinary business of the Partnership; (f) Confess a judgment against the Partnership; (g) Abandon or wrongfully transfer or dispose of Partnership property, real or personal; or 12. DISSOLUTION, TERMINATION AND LIQUIDATION (a) Dissolution The Partnership shall be dissolved and terminated upon the occurrence of: (i) _________Date___________ (ii) the death, resignation, insolvency, bankruptcy or other legal incapacity of the General Partner or any other event which would legally disqualify the General Partner from acting in its capacity; or (iii) the reduction to cash or cash equivalents of the Partnership Property; or (iv) the occurrence of any other event which, by law, would require the Partnership to be dissolved. (b) Liquidation In the event if the Partnership is dissolved or terminated for any reason whatsoever, the General Partner shall act as liquidator of the Partnership. The General Partner shall wind up the affairs of © Copyright 2013 Docstoc Inc. 8 the Partnership and sell or otherwise liquidate all the investments of the Partnership. The General Partner shall have full right to determine the time, manner and terms of any sale of Partnership property or assets pursuant to such liquidation. Upon payment of all debts and liabilities of the Partnership and all expenses of liquidation, the proceeds of the liquidation shall be distributed to all Partners in accordance with the balances in their respective Capital Accounts. Any Partner with a deficit balance in his Capital Account shall contribute to the Partnership an amount equal to extent of the amount that is deficit. (c) Death or Insanity of the Limited Partner. The death or insanity of a Limited Partner shall have no effect on the life of the Partnership and the Partnership shall not be dissolved thereby. 13. MISCELLANEOUS (a) Notices Any Notice and other communications which either party desires to give the other, may be given either personally or by post through certified mail, to the following address: General Partner_______________________ ___________________________________ ___________________________________ Limited Partner_______________________ ___________________________________ ___________________________________ (b) Loan to the Partnership If the Limited Partner lends any monies in addition to his Capital Contribution to the Partnership, the amount of any such loan shall not increase his capital account nor shall it entitle him to any increases in his share of the distribution of the Partnership, but the amount of any such loan shall be an obligation on the part of the Partnership to such Partner and shall be repaid to him along with the interest. (c) Governing Law This Agreement shall be construed in accordance with the laws of the State of ________. (d) Counterparts © Copyright 2013 Docstoc Inc. 9 This Agreement may be executed in multiple counterparts, each of which shall be an original but all of which shall constitute an instrument. (e) Binding Effect This Agreement shall be binding upon and shall inure to the benefit of the Partners and their spouses, as well as their respective heirs, legal representatives, successors and assigns. (f) Titles Paragraph titles are for descriptive purposes only and shall not control or alter the meaning of this Agreement as set forth in the text. EXECUTED as of the date herein first above stated. ________________________________ LIMITED PARTNER ________________________________ GENERAL PARTNER © Copyright 2013 Docstoc Inc. 10
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