Pennsylvania Uniform Limited Partnership Act

By Erika Waters

The Pennsylvania Uniform Limited Partnership Act provides for the formation of limited partnerships. These partnerships are called "limited" partnerships because they offer limited liability for business losses to some partners. This limited liability makes the limited partnership an attractive business entity to some business owners. Under Pennsylvania law, limited partnerships can be formed by two or more people.

The Pennsylvania Uniform Limited Partnership Act provides for the formation of limited partnerships. These partnerships are called "limited" partnerships because they offer limited liability for business losses to some partners. This limited liability makes the limited partnership an attractive business entity to some business owners. Under Pennsylvania law, limited partnerships can be formed by two or more people.

What is a Limited Partnership?

Under Pennsylvania law, a limited partnership must consist of at least one general partner and at least one limited partner. The general partner accepts personal liability for the losses of the business. However, the liability of limited partners is limited to the extent of their original capital investment. The limited partners are given limited liability because they are not involved in the daily activities of the partnership. Rather, the general partners manage the business.

Ready to start your LLC? Start an LLC Online Now

Choosing a Name

Before forming a limited partnership, the partners must select a name for the business. The partnership's name must consist of letters or numbers, and cannot include any symbols. The names of the partners may be used in the partnership's name. Further, under Pennsylvania law, the name of the partnership may incorporate the names of the limited partners without affecting their limited liability. Sections 8505 and 8523 of the Pennsylvania Uniform Limited Partnership Act address the naming requirements for limited partnerships in the state. Before deciding on a name, the partners must check with the Pennsylvania Department of State to ensure the name is not already in use by another partnership.

Formation

After agreeing to form a limited partnership, the partners must register with the Pennsylvania Department of State by filing a certificate of limited partnership that sets forth the partnership's name and address of its registered office. Additionally, all general partners must provide their name and business address. The limited partners need not be named in the certificate. Further, the certificate may contain other governance provisions agreed upon by the partners, including whether partnership interests will be evidenced by interest certificates. In addition, Pennsylvania law requires limited partnerships to maintain a registered office in the state with a street address; a post office box number is not a sufficient address. The partnership may also maintain offices in other states.

Indemnification

Pennsylvania law also allows partnerships to indemnify partners against business losses and obligations. This indemnification means the partnership will accept liability for losses that would otherwise fall on an individual partner. If a partnership chooses to provide such indemnification, it must include a provision to that effect in its certificate of limited partnership. However, Pennsylvania law prohibits indemnification of a partner if the losses incurred by him were the result of willful misconduct or recklessness.

Ready to start your LLC? Start an LLC Online Now
How to Dissolve a Limited Partnership in New York State

References

Related articles

Arkansas Limited Partnership Act

A limited partnership is a type of partnership in which partners enjoy the same limited liability as corporate shareholders. Arkansas limited partnership law is based on the Revised Uniform Limited Partnership Act, a model law that has been enacted by many states in an attempt to harmonize state partnership law throughout the United States.

New York Limited Partnership Law

The business structure of a limited partnership, or LP, can be attractive to financial backers interested in minimizing their personal liability. In New York, LPs are governed by the State Revised Partnership Act, which requires only one partner to be a general partner. All limited partners are then shielded from personal financial liability for most company decisions beyond the amount of their individual investments in the company. The process for registering an LP in New York starts with selecting a name, drafting a partnership agreement and filing certain documents required by law.

Comparison: LP and LLP

When forming a new business, it is important to select an appropriate business structure. You may consider a number of factors, such as the length of the business venture, the nature of the business and the level of involvement by the investors. Partnerships are a common option because they are relatively simple to set up and allow for a variety of management structures. A partnership may be formed as a general partnership, limited partnership or limited liability partnership.

LLCs, Corporations, Patents, Attorney Help

Related articles

New Mexico's Uniform Revised Limited Partnership Act

Like other business structures, partnerships vary by state and offer advantages and disadvantages depending on the type ...

How to Start a Limited Partnership in Missouri

Missouri gives you many options to choose from when deciding on a business structure, including sole proprietorships, ...

The Limited Partnership Act in South Carolina

A limited partnership contains two categories of partners: general partners and limited partners. General partners ...

South Carolina LLP Laws

South Carolina law regulates how a Limited Liability Partnership, or LLP, may form, operate, and ultimately dissolve. ...

Browse by category