Limited Business Partnerships: What You Need to Know
Business formation decisions offer key moments with far-reaching ripple effects of legal consequences. This is especially true when deciding on the best Utah limited business partnerships to create. Forming business agreements is best conducted with specialized legal oversight from Provo business attorneys. As you gather information, you’ll be better equipped to embark on the best long-term future for your new business. Let’s take a look at the foundations of the process and what you can expect when exploring this route of partnership.
Understanding Utah limited business partnerships
Limited partnerships (LP) are one of the unique types of Utah business partnerships. LPs are common for investments and require at least two individuals to form this type of business agreement. Many individuals involved in real estate or other capital-raising ventures choose this type of business partnership. Both partners will profit from the success of the business in a limited partnership. However, the role of those involved varies in the amounts of duties and responsibilities they carry. Provo business lawyers offer more details related to the best way to set up a partnership according to its unique design.
Here are two types of partners within a limited partnership agreement:
General partner – Acts as the operating partner of the private equity firm, in control of the partnership with unlimited liability exposure. The day-to-day tasks are governed by the general partner and this partner is responsible for making decisions that impact the financial state of the company. The entire load of financial debt obligation rests on the shoulders of the general partner. This partner is more “visible” in all aspects regarding the momentum and continuation of business development.
Limited partners – Includes individual or institutional investors in private equity with no interest or involvement in operating the business. Limited partners decide on an amount they wish to invest and that amount caps the maximum losses they might experience in a lawsuit. In other words, a partner cannot be sued for more than the amount that was invested. They are not involved in the management and daily operations of the business. Limited partners attract opportunity-seeking investors willing to partner with hopeful new investment success.
Requirements for limited partnerships
There are many aspects to the limited partnership process that need to be considered. Thankfully, formation documents or fees are not required in the state of Utah. However, there are other aspects to the development of a limited partnership. You’ll need to create a name that includes “limited partnership” or “LP” in the business name and secure a business domain. As a Utah resident, you are required to select a “registered agent”, someone in communication between your business and government entities. Having a registered agent will protect your business from falling into bad standing and/or failing to receive proper legal notification for lawsuits or other important government notices. You will also need to register your business with the secretary of state’s office.
Provide the following information when registering:
- Name of partnership
- Address of business location
- Address of agents and partners involved
- Signatures of everyone involved in the partnership
Your next step: Contacting business attorneys in Provo UT
Business lawyers in Provo UT offer the most reliable source of state-specific information regarding business partnerships and the many details involved. Equipping yourself and those interested in partnering with you is key, especially when you have the most current information regarding your business venture and what to expect further down the road. Proper navigation at the starting point of a business partnership may save you tremendously from unnecessary stress and dilemmas in the future. An experienced lawyer with Howard Lewis & Petersen offers valuable insight and strategic legal guidance for limited partnerships.
