Limited Partnership (LP or Ltd)

A Texas limited partnership is a partnership formed by two or more persons and having at least one general partner and at least one limited partner. In a properly drafted limited partnership, the limited partners will have liability protection as long as they do not participate in the control of the partnership. The general partner(s) will have control of the day-to-day operational aspects of the partnership as well as the liability for the partnership’s debts and obligations. Because of this liability, the general partner is typically a corporation, LLC or another limited partnership.

The limited partnership operates in accordance with a limited partnership agreement of the partners as to the affairs of the limited partnership and the conduct of its business. While the partnership agreement is not filed for public record, the limited partnership must file a certificate of formation with the Texas Secretary of State. Dallas business lawyer Zac Copp can assist clients in the entity formation for the general partner, the formation of the limited partnership, and drafting the limited partnership agreement.

Advantages of a Texas limited partnership:

Pass-through taxation
Limited partners are not held personally responsible for the debts and liabilities of the business
The general partner(s) have full control over all business decisions