What is a limited partnership?
In North Carolina, a limited partnership is a partnership formed pursuant to the North Carolina Revised Uniform Limited Partnership Act (“RULPA”), and consists of one or more general partners, and one or more limited partners.
Pursuant to RULPA, a certificate of limited partnership must be filed with the North Carolina Secretary of State. Additionally, the partnership must maintain certain information relating to the partnership at an office in North Carolina. The required information includes copies of the limited partnership certificate and any amendments thereto, a list of all the partners, the partners’ last known addresses, federal, state and local tax returns for the partnership for the last three years, copies of all powers of attorney, and copies of any effective written partnership agreements and any financial statements for the last three years.
A limited partnership is managed by one or more general partner(s) who possess all of the rights and powers of a general partner in a general partnership. Limited partners have no right to participate in the management of the limited partnership. However, certain actions of the general partner may require the written consent of the limited partners if specified in the partnership agreement.
Generally, pursuant to RULPA section 59-303, a limited partner is not liable for the obligations of a limited partnership beyond his contributions by reason of being a limited partner. There are certain situations where a limited partner will jeopardize his limited liability through his actions or conduct or by using his name in partnership matters. A general partner has the same liability as in a general partnership.
Generally, with respect to federal taxes, a limited partnership is taxed the same as a general partnership.