General Partnership/Limited Partnership/LLP Agreement

With this General Partnership Forms Package, you will find the general forms that will assist you with the formation, management and dissolution of a partnership. You may modify these forms to suit your particular needs or situation.

What is Partnership and Its Advantages?

If you're looking to start a business, joint venture, or already have a sole proprietorship, forming a partnership can be a great option for the business partners involved. First, you need to understand the types of partnership and their characteristics compared to other business entities.

  • Sole proprietorship - While a sole proprietorship has limited filing requirements for formation, it involves the most risk for personal assets. A business owner who has significant assets will not be able to protect personal assets from business creditors in the same manner as a corporation or partnership.

  • Corporation - A corporation offers limited liability protection for the personal assets of its owners and the ability to issue stock to raise capital. Business creditors can't claim personal assets of business owners for legal acts taken under corporate authorization. A corporation involves the most paperwork and legal formalities when it comes to issuing stock, creating bylaws and resolutions, etc. Corporate tax rates apply, unless you qualify and opt to be taxed as a subchapter S corporation, also called an S corp. S corporations are taxed like a partnership, but must have no more than 75 shareholders, issue only one class of stock, and have no shareholders that aren't U.S. citizens or resident aliens.

  • Joint venture partnership - A joint venture partnership typically involves a temporary arrangement or pooling of resources for a specific project, rather than an ongoing business concern.

  • Partnership - A partnership agreement template is the founding document that defines the roles and contributions of the partners. The agreement for partnership includes terms for how profits will be divided, the responsibilities of the partners, how to manage the partnership, and how decisions will be made. A buy-sell agreement is used to control what happens to the business partnership ownership and management if a partner sells their share, resigns, dies, or becomes incapacitated in the future. Partnerships can offers tax advantages by allowing income to be taxed at the partner's individual tax rate, rather than corporate rates. However, partnership doesn't offer the same protection for personal assets that a corporation does.

  • Limited partnership - A limited partnership has two types of partners. The limited partners provide financing, have little or no role in the management of the business, and aren't personally liable for business affairs. The general partner is responsible for running the business operations. General partnership also involves unlimited liability for partnership debts.

  • Master limited partnership - Master limited partnerships combine the tax benefits of a limited partnership with the ability to raise capital by publicly trading stock on the stock exchange. Master limited partnerships must generate their income from "qualifying sources", according to IRS rules - typically the production, processing, or transport of oil, gas, and coal.

  • Limited liability partnership - A limited liability partnership, often abbreviated as an LLP, is often confused with a limited partnership, but is a distinct entity. Laws vary by state, but they are most popular among professionals like lawyers, accountants, and architects. Some states require professional licensing to form an LLP. They offer the protection against unlimited personal liability that a corporation does, and avoid corporate taxation, allowing taxes to be apportioned among partners. Local laws on limited liability partnerships should be consulted.

US Legal Forms has a vast selection of partnership agreement templates for any type of partnership, as well as buy-sell agreements and other related forms. No matter what type of business partnership you have, we offer state-specific forms and packages to fit all your needs.

Top Questions about General Partnership/Limited Partnership/LLP Agreement

  • What is the difference between LLP general partner and limited partner?

    An LLP general partner manages the day-to-day operations and assumes personal liability for the business’s debts. In contrast, a limited partner typically invests capital but does not participate in management, limiting their liability to their investment. This distinction is crucial when forming your General Partnership/Limited Partnership/LLP Agreement, as it affects how partners interact and share profits. If you’re unsure, our platform can help clarify these roles in your agreement.

  • How do you fill out a partnership agreement?

    Filling out a partnership agreement involves articulating the roles, responsibilities, and contributions of each partner. Be specific about ownership shares, profit distribution, and decision-making processes. After drafting the agreement, it’s wise to have all partners review and sign it to confirm understanding and commitment. You can use our US Legal Forms resources to create a comprehensive General Partnership/Limited Partnership/LLP Agreement in no time.

  • How to fill out a partnership form?

    To fill out a partnership form, start by gathering necessary information such as the names and addresses of all partners involved. Ensure you clearly define the terms of the business operation, capital contributions, and profit sharing. Once you have all the details, review the partnership form for completeness and accuracy. If you need assistance, our platform offers templates for General Partnership/Limited Partnership/LLP Agreements that simplify this process.

  • What is the downside of an LLP?

    While an LLP provides liability protection, it also has some downsides. For instance, some states impose restrictions on who can form an LLP, typically limiting it to certain professions. Additionally, LLPs might face more rigorous compliance requirements compared to general partnerships. Understanding these factors when creating your General Partnership/Limited Partnership/LLP Agreement can help you make informed decisions and ensure your business operates smoothly.

  • Is LLP the same as LLC partnership?

    No, an LLP is not the same as a Limited Liability Company (LLC). Both entities provide limited liability protections, but they are structured differently. An LLP typically involves professional services and includes partners who manage the business directly, whereas an LLC offers more flexibility in terms of management and can have members who are not involved in day-to-day operations. It's important to choose the right framework, whether a General Partnership/Limited Partnership/LLP Agreement or an LLC, based on your specific business needs.

  • What is the key difference between LLP and partnership?

    The main difference between a Limited Liability Partnership (LLP) and a general partnership lies in liability protection. In an LLP, partners enjoy limited personal liability for business debts, meaning their personal assets usually remain protected. Conversely, in a general partnership, partners can be personally liable for the debts and obligations of the business. When forming a General Partnership/Limited Partnership/LLP Agreement, it's crucial to understand these distinctions to structure your business properly.

  • What is the difference between LLP and general partnership?

    The main difference between an LLP and a general partnership lies in liability protection. While a general partnership exposes partners to unlimited personal liability for debts, an LLP shields partners with limited liability, protecting their personal assets. This distinction is vital when forming a General Partnership/Limited Partnership/LLP Agreement, particularly if you want a partnership structure that balances shared management with financial protection.

  • What is the difference between a GP and an LP?

    A GP, or general partner, assumes full responsibility for managing the business and bears unlimited personal liability. An LP, or limited partner, contributes capital but has no role in management and enjoys limited liability, which protects personal assets beyond their investment. When contemplating a General Partnership/Limited Partnership/LLP Agreement, clarifying the roles of GPs and LPs helps establish a solid foundation for your partnership.

  • What is general partnership vs. limited partnership?

    In a general partnership, all partners share equal responsibility and liability for the business's debts and actions, facilitating straightforward management. In contrast, a limited partnership includes at least one general partner with full liability and the ability to manage, alongside limited partners who have restricted involvement and liability. Understanding these distinctions is key when drafting a General Partnership/Limited Partnership/LLP Agreement to align with your business goals.

  • Why would you choose an LLP over an LLC?

    Choosing an LLP over an LLC often comes down to management structure and liability protection. An LLP allows all partners to manage the business while enjoying personal liability protection, making it more appealing for professional firms where equal participation is beneficial. If you desire a collaborative environment with the protection typical of a General Partnership/Limited Partnership/LLP Agreement, an LLP may be the ideal structure for your needs.