2004 Limited Partnership - What Do I Need To Do To Set One Up?

Auguest 11, 2004
By Richard Smith, LLB

Ever since Texas first codified the concept of a limited partnership in 1991, essentially to afford protection to lawyers and accounts following the state's banking and loans failures, limited partnership have come to exist in various different forms - in various different states.

Like all of these other limited partnerships, a 2004 limited partnership is business entity used so as to provide investors a liability shield; in much the same way as shareholders of a company are provide a shield from their ultimate liability.

2004 limited partnerships are then limited liability partnerships, with both general partners and limited partners. The general partners of the partnership will have unlimited liability. Consequently, they'll also be the managing partners of the partnership. Limited partners will have limited liability, but in return for such limited liability will not be able to be involved in the day-to-day management of the partnership.

Essentially, then, in order to establish a 2004 LP the forming partners of the partnership need to submit a certificate of registration with the secretary of state of the state in which they wish to register the partnership.

2004 Limited Partnership - How Do They Differ?
Where a 2004 LP will differ from other limited partnership will be in the purpose of the partnership. In short, a 2004 LP may be established because (a) it is the intention of the partnership that the partnership only be in existence for a period of one year, i.e. 2004, or else the partnership wish to identify the year, i.e. 2004, with when the partnership was created.

In the case of the former, it is likely that the name of the partnership will have 2004 include as a term in its own right. In the case of the latter, it is likely that the partnership name will have the term 2004 enclosed in brackets, for example Smith (2004) Limited Partnership.

However, with respect to the liability of each partner in the partnership, this remains the same; regardless of the fact that it has designated itself as a 2004 LP. Thus, if it is the intention of the partnership that the partnership only be in existence for a total period of one calendar year, the partnership will need to ensure that they have a very well though out unwind provision in the partnership agreement.