A Limited Partnership Agreement is a written agreement that governs the actions of and the relationship between various partners in a partnership. A Limited Partnership is a partnership consisting of one or more general partners and one or more limited partners.

General partners bring no surprises. General partners of limited partnership:

• Have management control of the partnership;
• Have right to bind partnership;
• Have right to use partnership property
• Share in partnership’s profits; and
• Have joint and several liability for its debts.

Limited partnership in limited partnership:

• Share in partnership’s profits;
• Cannot bind partnership-usually;
• Cannot manage partnership-usually;
• Can sit on board of directors;
• Avoid joint and several liability; and
• Must disclose status as limited partners.

Main differences between general and limited partnerships:

1. Limited partnerships created by statute, must register with state;
2. Partners may override agreement, grant limited partners more powers than normal; and
3. Limited partnership can have pass-through taxation.

These agreements are preferred in filmmaking and real estate as a way of dividing up responsibilities. General partners invest the capital and retain control. Limited partners provide the legwork. All share in the profits.

It is important for the agreements to address control and authority, purpose of the partnership, profits, taxation, duration, termination, assignment (the limited partnership interest is considered a security by law), and winding up.

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