The partner must not take part in the management of

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• The partner must not take part in the management of the firm although he may inspect its books and advise the general partners. s. 6(1). • There must be at least one general or managing partner who remains fully liable for debts of firm The firm must be registered as a limited partnership; otherwise, it reverts to general partnership – s. 5. If a limited partner takes part in management, he will lose his limited status and become liable with the others to the extent of the liability incurred while he was taking part in management – s. 6(1). Similarly, if a limited partner draws from or receives his contribution or part thereof, he will be liable for liabilities incurred by the firm to the extent of the amount drawn out or received – s. 4(3). 18.4.2 MODIFICATIONS OF PARTNERSHIP LAW IN RELATION TO LIMITED PARTNERSHIPS • A limited partner will not be an agent of the firm or other partners and will therefore not be able to bind them to any contract. • A limited partner will not be liable to the wrongdoings of the other partners and will only be liable to their debts to the extent of his contribution. • The death, retirement, bankruptcy or incapacity of a limited partner shall not dissolve the partnership – s. 6(2). General partners shall not be entitled to dissolve the partnership because a limited partner had used his share in the business as security for a loan; and a limited partner cannot dissolve the partnership by giving notice to the other partners; and – s. 6(5)(c)(e). • Decision in the business will be made by a majority of the general partners who may admit partners into the business without reference to the limited partner – s. 6(5)(a)(d). Download free eBooks at bookboon.com
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BUSINESS ORGANISATIONS AND AGENCY 351 PARTNERSHIPS 18.4.3 REGISTRATION OF LIMITED PARTNERSHIPS A limited partnership must be formally registered and receive a certificate of registration. Until a partnership is registered as limited, it will be regarded as a general partnership and all the partners will be regarded as general partners. In order to register a limited partnership, an application form (LP5) must be completed, signed by all the partners, and delivered to the registrar of companies. The following particulars must be given in the application form: • The firm name; • The general nature of the business; • The principal place of business; • The full name of each of the partners; • The term, if any, for which the partnership is entered into, and the date of its commencement; • A statement that the partnership is limited, and the description of every limited partner as such; • The sum contributed by each limited partner, and whether it was paid in cash or otherwise – s. 8. The limited partnership comes into existence upon the acceptance and registration of the LP5 by the registrar who will issue a certificate of registration.
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  • Fall '19
  • Corporation, Managing Partner

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