Limited partnership agreement template
Define roles, responsibilities, and profit sharing terms with this limited partnership agreement template.
Define roles, responsibilities, and profit sharing terms with this limited partnership agreement template.
If you’re looking to form a limited partnership, having a clear and detailed limited partnership agreement is crucial.
This guide will walk you through what a limited partnership agreement (LPA) is, its purpose, who manages it, and its various use cases. We'll also dive into what a good limited partnership agreement template should include, how these templates are usually managed, the challenges involved and how Juro can automate the process.
A limited partnership agreement is a legal document that outlines the terms and conditions of a business partnership between one or more general partners and one or more limited partners. The general partners manage the business and assume liability for the partnership’s debts, while the limited partners contribute capital and share in the profits but have limited liability.
The primary purpose of a limited partnership agreement is to define the roles, responsibilities and rights of each partner involved in the partnership. It provides a clear framework for how the business will be operated, how profits and losses will be distributed, and how conflicts will be resolved. This helps to prevent misunderstandings and disputes among partners and ensure smooth business operations.
Limited partnership agreements are typically managed by the general partners. They are responsible for the day-to-day operations of the partnership and make decisions regarding the business.
The limited partners usually have no management authority and are not involved in the business’s daily activities. However, they do have the right to be informed about the business’ performance and can vote on certain major decisions as outlined in the agreement.
Here are some common scenarios where limited partnership agreements (LPAs) may be employed:
LPAs are frequently used in private equity and venture capital funds, where investors (limited partners) provide capital to be managed by general partners. The LPA details how the fund operates, profit distribution and the responsibilities of each party.
In real estate investments, LPAs are used when multiple investors pool resources to purchase, develop, or manage properties. The agreement specifies the investment terms, profit-sharing and roles of general and limited partners.
Similar to private equity, hedge funds use LPAs to define the relationship between the fund managers (general partners) and the investors (limited partners), including investment strategies, fee structures and withdrawal terms.
LPAs are common in the oil and gas industry, where multiple investors come together to fund exploration, drilling and production projects. The agreement outlines the investment structure, profit distribution, and the roles and responsibilities of each partner.
In various industries, LPAs are used in joint ventures where two or more parties collaborate on a specific business project. The agreement details the terms of the partnership – including capital contributions, management responsibilities, and the division of profits and losses.
Entrepreneurs may use LPAs when seeking investment from multiple investors to start or expand a small business. The agreement specifies the investment terms, profit-sharing arrangements, and the extent of involvement of each limited partner in the business operations.
Title. Clearly state the title of the agreement at the top.
Date. Include the date when the agreement is being executed.
Parties involved. List the full names and addresses of all general and limited partners.
Background. Provide background information on the partnership’s purpose and goals.
Intent. State the intention to form a limited partnership under the relevant jurisdiction's laws.
Key terms. Define important terms used throughout the agreement (e.g. “capital contribution”, “distribution”, “majority vote”).
Formation date. Specify the date of the partnership’s formation.
Duration. Define the length of time the partnership will exist.
Governing law. Identify the jurisdiction under which the partnership is formed and governed.
Initial contributions. Detail the initial capital contributions required from each partner.
Additional contributions. Outline any requirements for additional capital contributions and the procedure for capital calls.
Default provisions. Specify the consequences if a partner fails to make required contributions.
Distribution. Describe how profits and losses will be distributed among partners.
Timing. State the frequency and method of distributions.
General partner roles. Define the roles, responsibilities and authority of general partners.
Decision-making. Outline the decision-making processes, including voting rights and required majorities for different types of decisions.
Limited partner rights. Specify the rights and limitations of limited partners, including their involvement in management.
Withdrawal. Explain the conditions under which a partner can withdraw from the partnership and the process for doing so.
Transfer restrictions. Detail any restrictions on transferring partnership interests and the procedures for approval of transfers.
Buyout provisions. Provide the method for valuing and buying out a partner’s interest upon withdrawal or transfer.
Dissolution events. List the events that can trigger the dissolution of the partnership.
Winding up. Describe the process for winding up the partnership’s affairs, including the distribution of remaining assets.
Amendments. Specify the procedure for amending the agreement.
Notices. Detail how notices and communications between partners should be made.
Entire agreement. State that the agreement constitutes the entire understanding between the partners.
Severability. Include a clause that ensures if one part of the agreement is invalid, the rest remains in effect.
Execution. Provide spaces for the signatories to formalize the contract, along with the date of signing.
Limited partnership agreement (LPA) templates are managed through a structured process to ensure accuracy, consistency, and legal compliance. Here are the key steps involved:
1. Initial drafting
2. Review and approval
3. Version control
4. Distribution
5. Customization for specific partnerships
6. Execution and storage
7. Monitoring and updates
Juro’s AI-native contract management platform offers several features that can streamline the management of limited partnership agreements.
Secure storage. Store all LPAs in one secure, centralized repository, ensuring easy access and management.
Searchability. Use Juro’s OCR functionality to quickly find specific agreements or clauses.
Template creation. Automate the creation of LPA templates with predefined fields and clauses, ensuring consistency and accuracy.
Version control. Automatically track changes and maintain a log of different versions, ensuring the use of the most current template.
Real-time collaboration. Enable multiple stakeholders to collaborate on drafting and reviewing LPAs in real-time, reducing delays and improving efficiency.
Comments and approvals. Facilitate the contract review process with comment and approval workflows, ensuring all feedback is captured and addressed.
Dynamic templates. Create dynamic templates that can be easily customized for each specific partnership, adjusting terms to reflect unique arrangements.
Clause library. Use a library of standard clauses to quickly adapt templates to meet specific needs.
Integrated eSignatures. Streamline the signing process with integrated eSignature capabilities, so that all partners can review and sign agreements electronically.
Audit trails. Maintain a comprehensive audit trail of the signing process for legal compliance.
.png)
Automated compliance checks. Use AI-driven tools to perform compliance checks, making sure that LPAs adhere to internal policies and external regulations.
Regular updates. Keep templates up-to-date with changing laws and regulations through automated updates.
Insights. Gain insights into contract performance and risk with advanced analytics and reporting tools.
Custom reports. Generate custom reports to track key metrics, such as agreement status, approval times and compliance.
Tool integration. Integrate Juro with other business tools, such as CRM and project management software, enabling seamless data flow and improving efficiency.
API access. Use API access to connect Juro with existing systems, ensuring a smooth integration with your workflow.
By leveraging these features, Juro can help you manage limited partnership agreements more efficiently, reducing administrative burden, ensuring compliance, and enabling effective collaboration across your organization.
Juro's AI-native contract automation platform empowers all teams to create, agree, execute and manage contracts up to 10x faster than traditional tools. To find out more, hit the button below to book your personalized demo.
Juro is the #1-rated contract platform globally for speed of implementation.
.svg){kind=logo}
Hello. We are Juro Online Limited (known by humans as Juro). Here's a summary of how we protect your data and respect your privacy.
Modern businesses use Juro to automate contracts from drafting to signature and beyond, in one intuitive platform that every team can use. Want to see how?
Sign me up.svg)
.svg)
.svg)
.svg)
.svg)
.svg)
.svg)
.svg)
.svg)
.svg)
.svg)
.svg)
.svg)
.svg)
.svg)
.svg)
.png)
.svg)
.svg)
.svg)
.svg)
.svg)
.svg)
.svg)
.svg)
.svg)
.svg)
.svg)
.png)
.png)
.svg)
.svg)
.svg)
.svg)
.svg)
.svg)
.svg)
.svg)
.svg)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.svg)
.svg)
