A Limited Partnership (LP) is a partnership in which some members have limited liability for the debts of the firm. Their liability is limited to the extent of their contribution. As with a general partnership, a limited partnership is not a separate legal entity.
The partnership should consist of no more than 20 persons. If it is a banking partnership the maximum limit is 10 persons unless it is an investment and loan finance partnership in which case there is a limit of 50 persons.
The partnership must consist of at least one general partner and one limited partner. The general partner is liable for all the debts and obligations of the firm. The limited partner contributes a stated amount of capital and is not liable for debts that are beyond that amount. The limited partner must be excluded from the management of the firm and cannot have any authority to bind the other partners.
In the event of the closure of a Limited Partnership, the general partners are required to wind up its affairs unless the court otherwise orders. It is best practice to notify the Registrar of Companies of the dissolution.
For more information on this company type, please don’t hesitate to contact the experts at Company Bureau.Contact us now for further details