A limited partnership is a common business entity, and the creation of a partnership agreement is one of several important steps in formalizing the business. In short, a limited partnership agreement outlines how the partners will conduct their business. After the limited partnership is formed, the business has a number of legal responsibilities to remain in compliance with Wyoming law.
Limited partnerships are formed by filing a certificate of limited partnership with the Wyoming Secretary of State. There are two types of partner: a general partner, who provides management and is liable for debts of the partnership, and limited partners, who take no part in management but supply capital and are not personally liable for the debts of the partnership apart from their original investment. Further, a limited partnership only exists for a specific time period, and the certificate of limited partnership must state a date upon which the partnership will dissolve.
Contents of Agreement
A limited partnership agreement explains exactly how a partnership will operate, and may be quite detailed. The agreement may describe how labor will be divided, how profits will be distributed among the partners, which partners may vote on decisions affecting the business, how new partners may join the partnership, and what happens if the partnership dissolves. It is considered a legally binding contract among the partners, and must be followed unless amended.
Copies of any effective written partnership agreements must be kept at the office of the partnership and are subject to inspection and copying at the reasonable request, and at the expense, of any partner during ordinary business hours. There are a number of other documents that also must be kept at the office, including the full name and last known address of each partner, a copy of the certificate of limited partnership, and copies of the partnership's tax returns for the three most recent years. Additionally, if not included in the written partnership agreement, there must be a writing setting out the amount of cash or property each partner has contributed to the business, any additional plans for contributions by partners, any right of a partner to receive distributions or return of contributions, and any events which would cause the limited partnership to dissolve.
There are a number of reasons why a limited partnership would dissolve. The certificate of limited partnership will specify a date for dissolution, but the partnership may end earlier upon written consent of all parties, entry of judicial dissolution, a vote to dissolve by all limited partners, or the failure of limited partners to appoint another general partner within 90 days after a general partner withdraws. Once the partnership is dissolved, assets will be distributed first to creditors, and then to partners as determined in the partnership agreement.