"Let's go into business together! It'll be wonderful!"
It sounded like a great idea at the time. In fact, you both were gung ho as you signed the paperwork for your limited partnership. And at first, everything was smooth sailing. Then, the waters of your limited partnership turned choppy. Now, you're barely speaking with one another at all.
The limited partnership, as with general partnerships, can be an exciting development; it can also be fraught with potential disasters (some foreseeable, many not). Although it's a common form of partnership, it can lead to legal difficulties sometimes. It can also be confusing to understand for those without a legal background.
The limited partners (LPs) of a limited partnership do not have the same debt payback requirements as general partnership, which is a boon for many who are contemplating becoming LPs. However, they also have no management authority, which can be a problem, especially when the LPs have leadership personalities that clash with what the general partners (GPs) want to do with the corporation (i.e., the direction the boat is being steered.) Of course, at this point, an LP may want to convert to a GP, which may or may not be possible depending upon the nature of the organization.
There are many legal nuances to agreeing to become an LP; that's why caution should always be taken when choosing to be part of limited partnerships. Unfortunately, many well-meaning business people think they don't have to discuss their limited partnerships questions with an attorney; this is a huge mistake. Without consulting legal representatives about their intentions to join or form limited partnerships, they are playing a game of professional Russian roulette.
Of course, limited partnerships can be exactly what you need if you're forming a business venture. However, the best way to be sure is to make sure you talk with an attorney knowledgeable about the ins and outs of limited partnerships.
Our officers of the court will provide a free, no-obligation consultation to give you the most well-rounded, up-to-date advice on your limited partnerships questions. We'll help you decide what the best route for you to take will be, and we'll always honor your confidentiality and integrity.
Call us today.