Means that unless otherwise stipulated in the

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means that unless otherwise stipulated in the partnership agreement, a general partnership will dissolve on the departure, bankruptcy or death of any of the partners or if a partner has used his share of the business as security for a personal debt (s. 33 Partnership Act 1890). 18.4 LIMITED PARTNERSHIPS This type of partnership confers limited liability for the firm’s debts on one or some of the partners while others remain fully liable as general partners. Being a limited partner may appeal to people who wish to invest in a business in which they do not have much expertise, of which they do not wish to manage, or the financial risks of which they do not intend fully to bear. Limited partnerships are used mainly in the private equity, venture capital or investment industry. A limited partner may be a human being or an incorporated company; however, a person may not be a limited partner and a general partner at the same time. Limited partnerships are governed by the Limited Partnerships Act (LPA) 1907 (as amended by the Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 ). The Act introduced some modification on general partnerships, but unless expressly excluded, the Pa rtnership Act 1890 and the rules of common law and equity on partnerships remain applicable to limited partnerships – s. 7. The name of a limited partnership must end with “LP”, as in “Jonson and Smith LP”. Download free eBooks at bookboon.com
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BUSINESS ORGANISATIONS AND AGENCY PARTNERSHIPS 349 18.4.1 REQUIREMENTS FOR LIMITED LIABILITY According to s. 4 of the LPA 1907 : 2) A limited partnership must consist of one or more persons called general partners who shall be liable for all debts and obligations of the firm, and one or more persons to be called limited partners, who shall at the time of entering into such partnership contribute thereto a sum or sums as capital or property valued at a stated amount, and who shall not be liable for the debts or obligations of the firm beyond the amount so contributed. 3) A limited partner shall not during the continuance of the partnership, either directly or indirectly, draw out or receive back any part of his contribution, and if he does so draw out or receive back any such part, shall be liable for the debts and obligations of the firm up to the amount so drawn out or received back. Download free eBooks at bookboon.com Click on the ad to read more AXA Global Graduate Program Find out more and apply
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BUSINESS ORGANISATIONS AND AGENCY 350 PARTNERSHIPS Thus, in order to enjoy limited liability: • A partner must make a specific contribution to the business and must not draw from or receive back this capital during the life of the partnership. Contribution may be drawn or received only where the limited partnership is authorised by the Financial Conduct Authority (FCA) to operate an Authorised Contractual Scheme (ACS). In this case, it becomes an “authorised limited partnership”.
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