The Role of Limited Partnership in the Business Settings
The idea of matching up with compatible business partners will eventually hit the majority of entrepreneurs. Born from necessity, there is now a web presence of a company that seeks to bring business partners together.
Caution is still needed, and just like dating websites will seek to match you up with the potential spouse of your dreams, a failure to be open and a lack of a good dose of common sense can still set you up for failure. The goal is not to double your effort but to take advantage of the much-needed skills and knowledge that someone brings to your business which you lack. The personality conflicts will prevent a harmonious work relationship.
Age works two ways. While it is tempting to hook up with a business partner who is of similar age as you, do not limit yourself. Understand that taking on a partner is not a guarantee for business success. Instead, it is a way of stacking the odds in your favour! There are too many business settings you can have.
A limited partnership is a mode of partnership that bears similarities of a general partnership, but the difference is that the latter should have 2 general partners, and a limited partnership should have at a single general partner and one limited partner.
In all primary respects, general partners hp in similar position as great partners in a company, especially when they have a management control, some unique share of the right to use the partnership property, solidary liability for the debts of such partnership, and share the profits at predefined parts.As in a general partnership, the general partners have an authority, as the agents of the company, to bind certain contracts in a partnership with the third parties that are involved in the business of the partnership.
Defining limited partnership
Limited partners in a limited partnership have limited liability. In other words, the limited partners have zero management authority, and are not liable for the debts of such partnership (unless they have obligated themselves by another contract such as the guaranty). The limited partnership delivers the limited partners some good return on their investments (the same goes to a dividend), and the extent and nature of which is typically defined in partnership agreement. General Partners will tend to bear more economic risk compared to the limited partners, and if there is great financial loss, the general partners will be the ones liable.
Limited partnership interests are afforded a considerable level of protection and safety through the charging order mechanism.