ARTICLES OF LIMITED PARTNERSHIP
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FOR FINANCIAL PROFESSIONAL USE ONLY-NOT FOR PUBLIC DISTRIBUTION.
Specimen documents are made available for educational purposes only. This specimen
form may be given to a client’s attorney for consideration as a sample document, when
requested. This specimen form shall not be given to a client. This document should not
be used as drafted. It has not been adapted to the specific circumstances or objectives
of any individual client, nor has it been prepared to meet the legal requirements of any
particular state. Clients should be advised to seek legal counsel when entering into
any transaction and in the preparation of all legal documents. All formalities
required under applicable local law should be observed.
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ARTICLES OF LIMITED PARTNERSHIP
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(NAME OF PARTNERSHIP), L.P.
ARTICLE ONE – STATUTORY AUTHORITY
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This limited partnership is formed under the authority of the (name of state) Limited Partnership
Act, and shall commence its existence upon the filing of the Certificate of Limited Partnership,
and its acceptance by the (name of state) Secretary of State (or name of appropriate state
official).
ARTICLE TWO – NAME OF PARTNERSHIP
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The name of this limited partnership is (name of entity), L.P.
ARTICLE THREE – PRINCIPAL BUSINESS OFFICE
The principal business office of (name of entity), L.P., at which all required business records are
kept, is:
(name of entity and address in full).
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ARTICLE FOUR – REGISTERED AGENT FOR SERVICE OF PROCESS
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The name and address of the registered agent for service of process upon (name of entity), L.P.
is:
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(full name and address of registered agent)
ARTICLE FIVE – NAME OF GENERAL PARTNER
(full name and address of general partner)
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The name and address of the general partner of (name of entity), L.P. is:
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ARTICLE SIX – TYPE OF BUSINESS CONDUCTED
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(Name of entity), L.P. is in the business of (state type of business activities) and reserves the
right to engage in any lawful business permitted by the (name of state) Limited Partnership Act
or the comparable Act of any other state in which it may conduct business in the future.
ARTICLE SEVEN – SUCCESSOR GENERAL PARTNER
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If the general partner dissolves, dies, withdraws or otherwise ceases to serve as a general partner
at a time when there is no remaining general partner, then the limited partners may elect a
successor general partner within 90 days after such general partner's cessation of service.
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If the limited partners should fail to select a new general partner within the required 90-day
period, the successor general partner, by default, shall be (full name and address of successor
general partner).
The withdrawing general partner shall not be liable for partnership debts and obligations arising
after (his, her, its) withdrawal from the partnership.
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The successor general partner, whether by selection or default, shall not incur the liabilities and
responsibilities of a general partner until such time as (he, she, it) formally enters the partnership
in that capacity.
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ARTICLE EIGHT – PARTNERS' CAPITAL CONTRIBUTIONS
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The founding partners and their respective capital contributions and ownership percentages are
spelled out in Schedule A to this Agreement. The general partner shall maintain an updated
record of the ownership percentages arising from subsequent adjustments to the partner's capital
accounts.
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Additional contributions to capital may be made by either general or limited partners. When such
additions to capital are not proportionately made by all partners, so that the ownership
percentages are affected, these additions are subject to conditions. First, the general partner must
consent to and accept additional contributions to capital by limited partners. Second, limited
partners representing at least (state percentage) percent of the total partnership interest must
consent to an additional contribution to capital by a general partner. Consents by either general
or limited partners need not be in writing, but will be presumed by default without written
evidence to the contrary.
ARTICLE NINE – LIABILITY OF LIMITED PARTNERS
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A limited partner shall not be liable for obligations of the partnership nor act on behalf of the
partnership except as provided in the (name of state) Limited Partnership Act.
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A limited partner shall not be entitled to participate in the management of partnership business,
unless such limited partner also has an interest as a general partner.
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ARTICLE TEN – VOTING BY LIMITED PARTNERS
When partnership business or transactions require a limited partner's consent or vote, each
limited partner's vote will be based on his or her percent interest in the partnership.
[NOTE TO DRAFTSMAN: For example, if the limited partners
together own 90% of the partnership and the general partners own
10%, then a limited partner who had a 20% interest in the total
partnership would have a 22.22% voting interest among the
limited partners (20% divided by 90%). A limited partner with a
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15% interest in the whole would have a 16.67% voting interest
among the limited partners.]
ARTICLE ELEVEN – A PARTNERSHIP FOR FEDERAL TAX PURPOSES
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(Name of entity), L.P. is a partnership for federal tax purposes, and will file the appropriate
partnership tax returns in which partnership income, deductions, gains, losses and tax credits will
be reported. The general partner is responsible for filing the partnership tax returns, and for
reporting each partner's distributive share to him or her.
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The general partner may select the accounting method and taxable year of the partnership within
the constraints imposed by the federal income tax laws.
ARTICLE TWELVE –MAINTENANCE OF PARTNERS' CAPITAL ACCOUNTS
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The partnership shall maintain a non-interest-bearing capital account for each of the partners.
This account shall reflect all contributions to capital by that partner, and the partner's distributive
share of partnership income (or loss) shall be credited (charged) to the partner's account each
year. Any distributions to partners will likewise be charged to their capital accounts.
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The capital accounts shall be maintained in strict accordance with the information reported to the
Internal Revenue Service. Subchapter K of the Internal Revenue Code, or any successor to
Subchapter K, shall control all matters relating to a partner's distributive share of partnership
income or loss, as well as the cost basis of the partner's interest in the partnership.
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ARTICLE THIRTEEN – INCOME, DEDUCTIONS, GAIN, LOSS, CREDITS
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The ownership percentage of a partner in the partnership is used to determine the partner's
distributive share of income, deductions, gain, loss and credits, both annually and upon
partnership dissolution.
If the partnership realizes income by virtue of the general partner's performance of personal
services, such income shall be allocated to the general partner and not as earnings on capital.
ARTICLE FOURTEEN – ADDITIONAL CAPITAL CONTRIBUTIONS
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The general partner has the authority to request (but not to demand) additional capital
contributions by the partners. Such request must be made on a proportionate, nondiscriminatory
basis, so that each partner has the opportunity to maintain his or her percentage ownership in the
partnership.
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After 60 days have passed since the request was made, the general partner is authorized to
reallocate ownership percentages in the event some partners have elected to contribute additional
capital while others have not.
ARTICLE FIFTEEN – WORKING CAPITAL
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The general partner may retain out of distributable monies such cash reserves as are needed, in
its sole discretion, to provide working capital and expense reserves for the partnership.
ARTICLE SIXTEEN – TERM OF PARTNERSHIP
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(Name of entity), L.P. will terminate if, at any time, there is no remaining limited partner.
Otherwise, the partnership will terminate and dissolve upon a vote to do so by limited partners
representing at least a two-thirds interest in the partnership. The consent of the general partner is
not required to trigger the dissolution.
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During the term of the partnership, each partner waives his or her right to compel a dissolution of
the partnership. Nor may a partner compel a partition of partnership property.
None of the following events will terminate the partnership:
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death or disability of a limited partner;
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bankruptcy or insolvency of a limited partner;
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withdrawal of a limited partner (unless there are no remaining limited partners);
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death, disability or withdrawal of the general partner (unless no successor general
partner is in place after 90 days);
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addition of a new general partner; or
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any other occurrence or nonoccurrence that could be deemed under Indiana law to
terminate the partnership, absent the consent of the partners; in such a case the
partnership shall continue without liquidation and the winding up of partnership
affairs.
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ARTICLE SEVENTEEN – DISTRIBUTIONS UPON
DISSOLUTION OF THE PARTNERSHIP
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The general partner is directed to wind up partnership affairs promptly following a dissolution of
the partnership. All obligations of the partnership and the expenses of windup shall have priority
in the winding-up process. The general partner has authority to retain sufficient cash reserves to
cover any contingent liabilities. The remaining assets of the partnership shall be distributed in the
following order of priority:
repayment of loans made to the partnership by a partner, and any remaining
obligations for the purchase of a deceased or withdrawing partner's interest;
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distribution to the general and limited partners of an amount equal to the balance in
their respective capital accounts (a negative balance will be treated as a loan to the
partner from the partnership); and
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any remaining assets will be distributed to the partners in proportion to their
ownership percentages in the partnership.
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In carrying out the disposition of partnership assets, the general partner may sell assets, partition
assets, or distribute partial interests in assets.
The general partner shall prepare an accounting of the liquidation of the partnership, and have
the authority to require, as a condition of receiving a distribution, a written acknowledgment
from each partner that the accounting has been inspected and accepted; that the general partners
are discharged from further responsibilities; and that the general partners are released from
liability for lack of prudence or skill in the management of partnership assets, though not for
fraud, bad faith, or any undisclosed errors.
ARTICLE EIGHTEEN – REMOVAL OF GENERAL PARTNER
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The limited partners shall have the right to remove the general partner, to select a replacement,
and to add a new general partner, provided at least two-thirds of the total interest represented by
the limited partners vote to approve such action.
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When the general partner dissolves, dies or ceases to serve, the partnership shall be obligated to
purchase the general partner's interest. The purchase price and other conditions shall be specified
in a buyout agreement separate from these Articles of Limited Partnership.
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ARTICLE NINETEEN – AMENDMENTS TO
CERTIFICATE OF LIMITED PARTNERSHIP
When the general partner is unable or unwilling to execute an amendment to the Certificate of
Limited Partnership to witness the withdrawal and/or addition of a general partner, such
Certificate may be executed by the successor general partner and at least two-thirds in interest of
the limited partners.
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ARTICLE TWENTY – RESPONSIBILITIES OF GENERAL PARTNER
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The general partner shall be responsible for the operation and management of partnership
business, and shall have authority to do all of the following:
engage in transactions for the sale, purchase, lease, exchange or other transfer of
property on behalf of the partnership, and to execute the documentation necessary to
accomplish such transactions;
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retain assets in the form received by the partnership without obligation to reinvest
such assets productively;
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employ advisors and consultants as necessary for partnership business;
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secure insurance policies as necessary to protect the partnership from loss;
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register securities in street name under a custodian agreement with a securities broker;
and
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register or receive title to assets in the name of the partnership.
ARTICLE TWENTY-ONE – AFFIDAVIT OF GENERAL PARTNER'S AUTHORITY
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Any party engaging in a transaction with the partnership may rely on a signed affidavit of the
general partner in which such general partner affirms his or its authority to carry out the
transaction.
ARTICLE TWENTY-TWO – SUCCESSOR GENERAL PARTNER'S LIABILITY
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A successor general partner may rely upon the accuracy of the records and accounts turned over
to him or her from a preceding general partner. The successor general partner shall not have a
duty to have such records and accounts audited, nor shall the successor be liable for any errors or
omissions of a predecessor.
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ARTICLE TWENTY-THREE – GENERAL PARTNER'S COMPENSATION
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The general partner shall be compensated in a fair and reasonable manner for its managerial and
administrative services provided to the partnership. The general partner shall also be reimbursed
for all necessary and reasonable expenses incurred on behalf of the partnership.
ARTICLE TWENTY-FOUR – NO BOND REQUIRED
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The general partner, including any successors, shall not be required to provide a bond to secure
the general partner's performance.
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ARTICLE TWENTY-FIVE – CONSENT OF LIMITED PARTNERS REQUIRED
The general partner cannot engage in any of the following transactions unless it has the consent
of at least two-thirds in interest of the limited partners:
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incur partnership indebtedness in excess of a loan-to-net-book-value-of-assets ratio of
50%;
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sell substantially all of the partnership assets in liquidation of the partnership or other
cessation of its business; or
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compromise any claim or controversy in an amount exceeding 50 percent of the total
value of partnership assets.
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ARTICLE TWENTY-SIX – RESTRICTIONS ON LIMITED PARTNERS
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The limited partners may not participate in the management or operation of partnership business,
nor bind the partnership in any way, unless such limited partner is also the general partner and
acting in the latter capacity.
ARTICLE TWENTY-SEVEN – RESTRICTIONS ON
TRANSFER OF PARTNERSHIP INTERESTS
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A partnership interest in (name of entity), L.P., whether general or limited, may not be
transferred or encumbered without the consent of at least two-thirds in interest of the limited
partners. Such restrictions are intended to preserve the relationships of trust upon which this
partnership is formed, as well as the partnership's capital structure and tax status.
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The limited partnership interests have not been registered as securities under federal or state
laws, and may not be offered for sale unless so registered, or unless an exemption is obtained.
There are certain exceptions to the foregoing restrictions, which allow transfers of a limited
partnership interest in the following circumstances:
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The personal representative of the estate of a deceased limited partner succeeds to the
rights and powers of the limited partner. The limited partner may designate a
beneficiary (or beneficiaries) for his or her limited partnership interest, and this will
be binding upon the partnership if delivered to a general partner within 60 days of the
limited partner's death.
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The personal representative of an incapacitated limited partner succeeds to the rights
and powers of a limited partner if active pursuant to letters of guardianship or a
durable power of attorney.
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A limited partner may transfer his or her limited partnership interest during life for
the following purposes: to make a gift in trust for the limited partner, his or her
spouse, and/or his or her descendants; or to make a gift to a qualified public charity
under Internal Revenue Code Section 170(c).
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The recipient of a limited partnership interest transferred in any of these ways shall be bound by
these Articles of Limited Partnership; however, the recipient of any other type of transfer will not
be recognized. During any dispute, the partnership is not required to distribute the income of the
disputed partnership interest, but will credit such income to that interest's capital account.
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ARTICLE TWENTY-EIGHT – PARTNERSHIP INTEREST
ACQUIRED BY COURT JUDGMENT
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If a third party acquires a limited partnership interest as a result of a court judgment, the
partnership will then have the option to acquire such interest from the transferee at its fair market
value within 90 days of the third party's acquisition of the interest. The fair market value shall be
determined by a qualified business appraiser who is a member of the American Society of
Appraisers. The transferee must accept or reject the appraisal value with 60 days of its receipt. If
not formally rejected, the valuation therein will be deemed accepted. If the appraisal is formally
rejected, the transferee will be a non-voting owner of the limited partnership interest until the
valuation dispute is resolved, and the sale carried out.
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The general partner may transfer the partnership's option to one or more of the limited partners,
provided at least 60 percent in interest of the limited partners consent.
ARTICLE TWENTY-NINE – NEW LIMITED PARTNER
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The consent of at least two-thirds in interest of the limited partners shall be required to admit a
new limited partner. When a new limited partner is admitted, the ownership percentages of
partners will be adjusted accordingly.
Similarly, the redemption of a partner's interest or its acquisition by the partnership will require
adjustment of the ownership percentages of the remaining partners.
ARTICLE THIRTY – GENERAL PARTNER'S POWER OF ATTORNEY
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The limited partner's appoint the general partner as their attorney-in-fact to execute, certify and
record all partnership documents. This is a durable power of attorney and will survive any
incapacity of a limited partner.
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ARTICLE THIRTY-ONE – NOTICE
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Any notice mentioned in these Articles of Partnership will be valid if delivered in person to the
intended recipient if sent by certified mail with return receipt requested. Each partner shall be
required to provide the general partner with his or her current address, and to notify the general
partner of any change of address.
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ARTICLE THIRTY-TWO – HEIRS, SUCCESSORS, AND ASSIGNS
These Articles of Partnership shall be binding upon not only the contracting parties, but also
upon their personal representatives, heirs, successors and assigns.
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Accepted for the Partnership:
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Dated this_____day of__________, (year).
By:________________________
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(typed name), General Partner
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State of_______________
County of_____________
The person above named appeared before me on the above date and acknowledged that (he or
she) executed the preceding document as the duly authorized agent of (name of entity), L.P.
Witness my hand and seal this_____day of___________, (year).
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_______________________
Notary Public
My Commission Expires:
GENERAL PARTNER:
(name and address of General Partner)
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Capital Contribution: $__________
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SCHEDULE A
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Percentage of Ownership: _____percent
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LIMITED PARTNERS:
(name and address of Limited Partner)
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Capital Contribution: $__________
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Percentage of Ownership: _____percent
[repeat for each Limited Partner]
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This information is provided by American General Life Insurance Company (AGL) and
The United States Life Insurance Company in the City of New York (US Life), members
of American International Group, Inc. (AIG).
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All companies mentioned, their employees, financial professionals, and other
representatives, are not authorized to give legal, tax, or accounting, advice, including
the drafting or execution of any legal document. Applicable laws and regulations are
complex and subject to change. Any tax statements in this material are not intended to
suggest the avoidance of U.S. federal, state or local tax penalties. AGL and US Life
shall not be liable for any loss or damage caused by the use of, or reliance on, the tax,
accounting, legal, investment or financial items contained in this material.
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FOR FINANCIAL PROFESSIONAL USE ONLY-NOT FOR PUBLIC DISTRIBUTION
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©2015. All rights reserved.
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