A limited partner, also known as a special partner, is an individual who invests in a business and receives a portion of the profits. However, they do not participate in the management of the business and are not liable for any debts beyond their initial investment.
A special partner, also known as a limited partner, is a type of partner in a business who receives profits from the business without participating in its management and without being liable for any amount beyond their initial investment. For instance, if John invests $10,000 in a business with his friend Sarah, he becomes a special partner. Despite not being involved in the business’s management, John still receives a portion of the profits. In the event that the business incurs debts or liabilities, John is only responsible for the $10,000 he initially invested and not for any additional amounts. This example exemplifies the concept of a special partner as John is not engaged in the day-to-day operations of the business and is solely accountable for his investment. This type of partnership is commonly seen in businesses where one partner provides the capital while the other manages the business.
A special partner is a type of partner in a limited partnership who has limited liability and is not actively involved in the management of the partnership.
A special partner has limited liability and is not involved in the day-to-day management of the partnership, while a general partner has unlimited liability and is actively involved in the management of the partnership.
A special partner typically has the right to share in the profits and losses of the partnership according to their agreed-upon percentage, but they do not have the right to participate in the management of the partnership. Their responsibility is limited to their agreed-upon capital contribution.
No, a special partner’s liability is limited to their agreed-upon capital contribution. They are not personally liable for the partnership’s debts beyond that amount.
Yes, a special partner can be removed from the partnership if the partnership agreement allows for it or if there is just cause for their removal, such as a breach of the partnership agreement.
Yes, a special partner can generally transfer their interest in the partnership, but the partnership agreement may have restrictions or require the consent of the other partners.
No, a special partner is specifically excluded from participating in the management of the partnership. Their role is limited to providing capital and sharing in the profits and losses.
No, a special partner is not personally liable for the actions of other partners. Their liability is limited to their agreed-upon capital contribution.
Yes, a special partner can be held personally liable for their own actions within the partnership if they breach their duties or obligations as outlined in the partnership agreement.
Yes, a special partner may be responsible for their share of the partnership’s taxes based on their agreed-upon percentage of profits and losses. However, they are not personally liable for the partnership’s tax obligations beyond their capital contribution.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 17th April 2024.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
- Page URL:https://dlssolicitors.com/define/special-partner/
- Modern Language Association (MLA):Special Partner. dlssolicitors.com. DLS Solicitors. May 09 2024 https://dlssolicitors.com/define/special-partner/.
- Chicago Manual of Style (CMS):Special Partner. dlssolicitors.com. DLS Solicitors. https://dlssolicitors.com/define/special-partner/ (accessed: May 09 2024).
- American Psychological Association (APA):Special Partner. dlssolicitors.com. Retrieved May 09 2024, from dlssolicitors.com website: https://dlssolicitors.com/define/special-partner/
Our team of professionals are based in Alderley Edge, Cheshire. We offer clear, specialist legal advice in all matters relating to Family Law, Wills, Trusts, Probate, Lasting Power of Attorney and Court of Protection.
All author posts