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Monday, 13 June 2011 04:33
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A Limited Partnership is a business entity comprising two or more partners who operate or manage a business together. This structure provides the following key advantages, namely:
- Allows for and is easier to attract investors since the only liability for limited partners is the capital they invest in the business. As an added benefit, they are also personally shielded from company debts and other liabilities.
- Limited partnerships are a great choice for individuals who lack the time or expertise to run a business but who would like to share in the profits.
- Limited partners can leave or be replaced without the Limited Partnership being dissolved.
- Limited partnerships are frequently formed to acquire, operate and hold real estate.
The minimum number of partners for a Labuan Limited Partnership is two partners i.e. one general partner and one limited partner and the maximum number of partners allowed is 50 partners.
Partners may be a corporation except for firms which are set up to offer professional services, in which case, it must consist of natural persons and supplemented with professional indemnity insurance coverage.
a) General Partner
General partners are, in all major respects, in the same legal position. Therefore, they have management control; share the right to use partnership property; share the profits of the firm in predefined proportions; and have joint and several liabilities for the debts of the partnership.
b) Limited Partner
Limited partners contribute capital to the partnership but do not participate in the daily operations of the company. The limited partner shall not be liable as a general partner unless the limited partner participates in the management of the Limited Partnership.
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Last Updated on Friday, 30 March 2012 00:45
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