A limited partnership is a modified partnership and is a creature of State statutes. Most States have either adopted the Uniform Limited Partnership Act (ULPA) or the Revised Uniform Limited Partnership Act (RULPA). In a limited partnership, certain members contribute capital, but do not have liability for the debts of the partnership beyond the amount of their investment. These members are known as limited partners. The partners who manage the business and who are personally liable for the debts of the business are the general partners. A limited partnership can have one or more general partners and one or more limited partners.
The general partners manage the business of the partnership and are personally liable for its debts. Limited partners have the right to share in the profits of the business and, if the partnership is dissolved, will be entitled to a percentage of the assets of the partnership. A limited partner may lose his limited liability status if he participates in the control of the business.
The Texas General Form of Limited Partnership Agreement is a legally binding document that establishes a limited partnership in the state of Texas. This agreement outlines the rights, responsibilities, and obligations of the general and limited partners involved in the partnership. The Texas General Form of Limited Partnership Agreement consists of several important sections, including: 1. Name and Address: The agreement starts by stating the legal name of the limited partnership and the principle place of business where the partnership will operate. 2. Purpose of the Partnership: This section outlines the specific business or investment purpose for which the partnership is being formed. 3. Capital Contributions: This clause specifies the initial capital contributions made by each partner, whether in cash or other assets, and the percentage of ownership allocated to each partner based on these contributions. 4. Profits and Losses: The agreement determines how profits and losses will be shared among the partners. It may stipulate whether the distribution will be based on the percentage of ownership or another agreed-upon allocation formula. 5. Management and Decision-making: This section outlines how the partnership will be managed and the decision-making process. It may specify that general partners have the authority to make decisions on behalf of the partnership and whether limited partners have voting rights on certain matters. 6. Distributions: The agreement defines how and when distributions will be made to partners, including the timing and frequency of profit distributions. 7. Transfer of Partnership Interests: This section governs the transfer of partnership interests between partners, outlining any restrictions or requirements that need to be followed. 8. Dissolution: The agreement includes provisions for the dissolution of the partnership, specifying the circumstances under which the partnership will be terminated and how the assets will be distributed. Different Types of Texas General Form of Limited Partnership Agreement: 1. Limited Partner Contribution Agreement: This agreement is used when a limited partner wishes to make additional capital contributions to the partnership. 2. Amendment Agreement: This type of agreement is used to modify or amend certain provisions of the original General Form of Limited Partnership Agreement. 3. Conversion Agreement: A conversion agreement is used when a limited partnership wishes to convert into another business entity, such as a corporation or limited liability company. Overall, the Texas General Form of Limited Partnership Agreement is a crucial document that outlines the terms and conditions for operating a limited partnership in Texas. It provides clarity and protection for both general and limited partners, ensuring a smooth and legally compliant operation of the partnership.
