A limited partnership consists of both general and limited partners. General partners actively manage affairs of the business and are liable for all debts and obligations. Meanwhile, limited partners are passive investors who contribute unlimited capital and aren’t responsible for anything above the amount they invest.
Setting up a limited partnership allows you to reduce the liability risk of limited partners, which can be useful when attracting investment partners to your business. They are also unable to partake in the management of the business, which can be ideal for investors who don’t want involvement in the running of an organisation.
How do I register my limited partnership?
A limited partnership must be registered at Companies House under the Limited Partnerships Act 1907. You will need to fill out an LP5 form which requires your firm’s name, the nature of your business and its address. You will also have to provide the full name and description for each partner, and a statement confirming that the partnership is limited.
Who can be a partner?
Any individual or company can become a general or limited partner. However, a person is unable to be both a general and limited partner at the same time.
Why set up limited partnership agreements?
It is important for all partners to set up limited partnership deeds. Otherwise, the partnership will be governed by the Limited Partnerships Act 1907. Through setting up a limited partnership agreement, you can outline the formation, name, location of your business, while also regulating its terms and capital contributions. This provides you with greater freedom over the management of your business and partnership, allowing you to deal with the specific requirements of each partner.
Our services
For further information on setting up a limited partnership, contact Ralli solicitors on 0161 832 6131.
Whether you want to know more about who can be a partner, the registration process or limited partner restrictions, our legal team will be able to provide you with valuable advice. We can also help you to set up a limited partnership, assisting in the registration process and drafting up a suitable partnership agreement for your business.