A limited partnership is a modified partnership. It has characteristics of both a corporation and a general partnership. 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. 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 Oregon Guaranty of Payment by Limited Partners of Notes Made by General Partner on Behalf of Limited Partnership ensures the financial security and repayment of notes issued by a limited partnership. This legally binding agreement safeguards the interests of lenders by holding both the general partner and limited partners responsible for the repayment of debt. In Oregon, there are two primary types of Guaranty of Payment by Limited Partners: 1. Unlimited Guaranty of Payment: Under this arrangement, the limited partners extend an unlimited personal guarantee for the repayment of the notes made by the general partner on behalf of the limited partnership. This means that in case of default, the lenders can seek payment not only from the assets of the limited partnership but also from the personal assets of the limited partners. 2. Limited Guaranty of Payment: In this variation, the limited partners provide a limited personal guarantee for the repayment of the notes. Unlike the unlimited guaranty, the liability of the limited partners is capped at a predetermined amount. If the limited partnership defaults on the note payment, the lenders can only seek reimbursement up to this specific limit from the personal assets of the limited partners. Both types of Guaranty of Payment by Limited Partners ensure lenders have additional security when extending credit to a limited partnership. Lenders are not solely dependent on the limited partnership's assets but can also seek repayment from the personal resources of the limited partners. This offers lenders greater reassurance and serves as a strong deterrent against potential defaults. Oregon's Guaranty of Payment by Limited Partners of Notes Made by General Partner on Behalf of Limited Partnership is a critical legal instrument that provides protection and reassurance to lenders. By establishing the responsibilities and liabilities of both the general partner and limited partners, this agreement ensures the successful repayment of notes and fosters a transparent and secure financial environment.
