Limited Partnership Agreement

Neutral - 2 Parties

No. of Prokens Required: 3 |

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Description:

Two Parties Limited Partnership Agreement (a general partnership) will be established under local law. It provides a basic Limited Partnership framework only. This agreement is drafted in Neutral Form.

 

LP1 (the "Limited Partner") wishes to establish a partnership with the General Partner (each a “Partner”, together the “Partners”) in [Territory] under the name of [name] (the Partnership) for the purpose of [business].

 

The Partners wish to regulate their relationship as partners in the Partnership and the management of the Partnership in accordance with the terms of this Agreement.

 

The Business shall be conducted in the best interests of the Partnership on sound commercial profit-making principles in accordance with the Business Plan. The Partners shall use all reasonable endeavours to procure its prompt and effective implementation.

 

The Partners shall respectively make initial contributions to the capital of the Partnership as follows:

(a) General Partner: [describe or refer to commitment to provide initial contribution: cash, assets, transfer of property etc.]

(b) LP1: [describe or refer to commitment to provide initial contribution: cash, assets, transfer of property etc.]

 

The Partners acknowledge and agree that, following the initial contributions:

(a) General Partner's Capital Account shall be credited;

(b) LP1's Capital Account shall be credited.

 

The Percentage Shares of the Partners shall accordingly be X per cent for General Partner and Y per cent for LP1 (or such other percentages as may from time to time be a consequence of any sale, assignment, transfer or disposal of the whole or part of a Partner's Partnership Interest pursuant to or as permitted by this Agreement).

 

Each Partner undertakes that it will during the term of this Agreement contribute its Percentage Share of all funding required by any relevant Budget or as agreed by the General Partner.

 

Subject to any other provision of this Agreement, a person may be admitted as a General Partner after the registration with the Companies House is filed only with the written consent of each General Partner and the vote or written consent of fifty-one percent (51%) of all Partners.

 

Subject to the provisions governing transfers of Partnership interests, a person may acquire an interest in the Partnership directly from the Partnership and be admitted as an Additional Limited Partner only with the approval of the General Partner and fifty-one percent (51%) of all Partners. Each Partner's interest will be proportionally reduced to admit the new Limited Partner.

 

The Limited Partner shall not participate in the management or operation of the business of the Partnership. The General Partner may not be removed by the Limited Partner.

 

The Partnership shall pay reasonable fees to the General Partner for services rendered to the Partnership, as determined by by the Partners.

 

Other than his share of profits and losses, the General Partner shall not be entitled to any additional compensation for services rendered as General Partner.

 

Any General Partner can require the Chief Executive or any other Executive Manager to attend (but not vote at) all or part of any meeting of the General Partner in order to provide information or views. The General Partner must notify the relevant Executive Manager and the Chairperson and the other General Partners within five Business Days of receiving the notice of meeting that the Executive Manager's attendance is required and specify the items on which his information or views will be required.

 

Resolutions of the General Partner shall be passed as follows:

(a) Each General Partner has one vote. Any General Partner who is absent from the meeting may nominate any other General Partner who is present to act as his alternate and to vote in his place at the meeting.

(b) The General Partners present (if constituting a quorum) shall nominate a chairperson for that meeting; any General Partner acting as such a chairperson shall continue to have his vote.

(c) Resolutions of the General Partners are passed by simple majority.

(d) Should the number of votes be identical under (c), the resolutions shall be passed by a majority of the shares (51%) of the General Partners.

 

In the event of deadlock on any vote taken which cannot be resolved after a further meeting of the General Partners, the matter shall be referred to the Chief Executives or other senior representatives of the Partners whose determination (if unanimous) shall bind the General Partners.

 

The following Reserved Matters shall in any event require unanimity of the General Partners:

(a) any change in the nature or scope of the Business (including any material business acquisition or disposal exceeding [amount] in value or any material partnership or joint venture);

(b) any material change in the organisation of the Partnership;

(c) appointing or removing the Chief Executive or any material change in their respective employment terms;

(d) approving the Business Plan and Budget or any material deviation from the Business Plan or Budget;

(e) any expenditure on any particular item which is more than [amount] (except as provided for in the relevant Budget);

(f) disposing (including the grant of any security interest or other encumbrance over) any Partnership property where the value of the property exceeds [amount] ;

(g) any transaction with a Partner or its Affiliate (or any material amendment to any contract with a Partner or its Affiliates);

(h) removing Auditors and appointing new Auditors;

(i) any change in the accounting policies of the Partnership;

(j) commencing, settling or ceasing any litigation or arbitration involving the Partnership other than any litigation or arbitration involving (i) a dispute pursuant to this Agreement or (ii) a claim of less than [amount];

(k) the borrowing or lending by the LLP or the giving of [amount];

(l) any guarantee or undertaking by the LLP of or in respect of any sum or connected sums being (in the aggregate where appropriate) in excess of [amount];

(m) any determination whether any cash available to the Partnership is surplus to the requirements of the Partnership.

 

Except as provided below, the Limited Partner shall not have either the obligation or the right to take part, directly or indirectly, in the active management or control of the business of the Partnership. The following Partnership actions may only be taken after approval by vote of the Partners:

(a) veto of a call for additional capital;

(b) admission of an additional General Partner;

(c) admission of an additional Limited Partner;

(d) admission of a Successor General Partner;

(e) amendment of the Partnership Agreement as provided in

(f) the sale or transfer of the Business;

(g) any loan by a Partner to the Partnership;

(h) consent to dissolution;

(i) remuneration of the General Partner; and

(j) election of a new general partner.

 

The quorum for any meeting of the Partners (other than an adjourned meeting) is Partners holding more than 50% of the voting power shall be present in person or by proxy with at least one representative from each General Partner. If that quorum is not present within 30 minutes from the time appointed for the meeting or if during the meeting the quorum ceases to be present, the meeting shall be adjourned for seven (7) Business Days.

 

The General Partner shall exercise ordinary business judgment in managing the affairs of the Partnership. Unless fraud, deceit, or a wrongful taking is involved, the General Partner shall not be liable or obligated to the Limited Partner for any mistake of fact or judgment made by the General Partner in operating the business of the Partnership that results in any loss to the Partnership or its Partners. The General Partner does not, in any way, guarantee the return of the Limited Partner' capital or a profit from the operations of the Partnership. The General Partner shall not be responsible to any Limited Partner because of a loss of that Partner's investment or a loss in operations, unless it has been occasioned by fraud, deceit, or a wrongful taking by the General Partner.

 

Any of the Partners may engage in or possess an interest in other business ventures of every nature and description independently or with others, and neither the Partnership nor the Partners shall have any right by virtue of this Agreement in and to any such independent ventures or to the income or profits derived therefrom.

 

How to use this Document?

 

This document should be carefully read by the signing partners.

 

Both parties should sign and return a copy, and once signed, both parties should get a copy. To avoid any future disputes, both parties may wish to have their signatures witnessed.

 

If either party wishes to amend the agreement in the future, both parties should agree to do so, and the original agreement and amendments should be recorded in writing and signed by both parties.  

 

How to Tailor the Document for Your Need?

 

1. Click “Create Document” button and fill in the details of the parties. You can click the “Fill with Member’s Information” button to complete the party’s information with your personal or business information saved to your account.

 

2. Please fill in any additional information by following the step-by-step guide on the left-hand side of the preview document and click the “Next” button.

 

3. When you are done, click the “Get Document” button and you can download the document in Word or PDF format.

 

4. Please get all parties to review the document carefully and make any final modifications to ensure that the details are correct before signing the document. Each party should have a copy of the executed document.

 

Document Type:

Agreements / contracts

Category:

Business > Setup of Business / Entity > Partnership / Limited Partnership / LLP Agreement

 
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