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B7.106 Limited partnerships

A limited partnership is one established under the Limited Partnerships Act 1907. The difference between a limited partnership and a general partnership (see B7.101) is that in addition to one or more general partners, limited partnerships will also have one or more limited partners. The limited partner subscribes an amount of capital to the limited partnership and are only liable for the debts and obligations of the firm up to a level equal to this capital amount subscribed¹. A limited partnership must contain at least one general partner whose liability is not limited².

As a result of this limited liability restriction a limited partner has no power to bind the partnership or to dissolve the partnership and may not take part in the management of the business, other than performing high level inspection of the partnership books and advising on the strategic direction of the partnership. If more than this is done, the partner is liable for all debts and obligations of the partnership incurred while they take part in the management as