Articles of limited partnership.
Articles of Limited Partnership
This limited partnership agreement is made on _________[date] in _________ by and between _________ as general partners and _________ as limited partners.
The parties to this agreement by it form a limited partnership pursuant to the provisions of the Uniform Limited Partnership Act of the State of _________, and that act shall govern the rights and liabilities of the parties to this agreement.
The name of this limited partnership shall be _________.
This limited partnership shall begin the day the certificate of limited partnership is duly filed and shall continue until terminated in accordance with this agreement.
The purposes of this limited partnership are to invest in improved and unimproved real estate in the State of _________ and to lease, develop, sell, mortgage, or otherwise transfer all or a portion of the real estate with the goal of earning a profit for the limited partnership.
Principal Place of Business
The principal place of business of the limited partnership shall be in _________ or such other place or places as the general partners may designate from time to time.
(a). The general partners shall transfer to the limited partnership the real estate described in Exhibit I under the terms and conditions set forth in that exhibit. The general partners shall not be required to make any additional contributions to capital.
(b). Each limited partner shall contribute the amount of cash specified in Exhibit II.
(c). If any limited partner fails to make h— entire cash contribution within 30 days after the date of this agreement, then —he will be in default, and the general partners may sell and transfer all or any part of the limited partnership interest of the defaulting limited partner to another limited partner or, if no other limited partner will purchase the interest, to any other person. The sale and transfer shall be made in such manner as the general partners may determine, and upon such sale and transfer, the defaulting limited partner shall cease to have any right, title or interest in the limited partnership with respect to the portion sold and transferred. Notwithstanding any sale and transfer, the defaulting limited partner shall remain liable to the limited partnership for the delinquent amount, less any net amount received from the sale and transfer, plus interest from the date due until the date paid at the rate of _____% per annum and all reasonable attorney fees, costs, and expenses incurred by the limited partnership to recover the delinquent amount.
(d). Each partner's capital contribution shall be credited to a separate capital account to be maintained for each partner. No interest shall be paid on any capital contribution.
(a). The partnership business shall be managed by the general partners. In addition to those powers granted to the general partners by law, the general partners shall have the power to execute leases and management contracts, incur obligations on behalf of the limited partnership in connection with the business, and execute on behalf of the limited partnership any and all instruments necessary to carry out the purposes of the limited partnership, including the power to dispose of the real property or other assets of the limited partnership for full and adequate consideration. However, the general partners may not sell or pledge more than _____% of the assets owned by the limited partnership at the time of sale or pledge in one or a series of transactions without the affirmative vote of limited partners entitled to _____% or more of the profits of the limited partnership.
(b). No limited partner may participate in the management of the limited partnership or subject the limited partnership to any liability or obligation.
(c). The general partners may employ persons in the operation and management of the limited partnership business for such compensation as they determine.
(d). The general partners have no authority to do any act in contravention of this agreement or the certificate of limited partnership; to do any act that would make it impossible to carry on the limited partnership's ordinary business; to confess a judgment against the limited partnership; to admit anyone as a partner except as otherwise provided in this agreement; or to possess or assign rights in limited partnership property for other than a limited partnership purpose.
Status of Limited Partners
(a). The limited partners are not personally liable for the expenses, liabilities, or obligations of the limited partnership.
(b). A limited partner may only withdraw h— capital account following the termination of the limited partnership, but no part of the capital account of any limited partner may be withdrawn unless all partnership liabilities, other than liabilities to partners on account of their capital contributions, have been paid or unless the partnership has sufficient assets to pay such liabilities. In making such a withdrawal, no limited partner may demand or receive property other than cash in return for his capital contribution.
Addition of Limited Partners
Except when a limited partner has defaulted in making h— capital contribution, the general partners may not admit additional limited partners without the consent of limited partners entitled to _____% of the profits of the limited partnership.
Profits and Losses
(a). Profit. The net profit of the limited partnership shall be equal to the taxable income of the limited partnership as shown in the limited partnership tax return filed with the United States.
Except as provided in Article XI, profits shall be divided as follows:
(1). _____% to the capital accounts of the general partners in accordance with the percentages set forth in Exhibit I.
(2). _____% to the capital accounts of the limited partners in accordance with the percentages set forth in Exhibit II.
(b). Losses. All losses shall be entirely allocated to the limited partners' capital accounts in proportion to their capital contributions, but no limited partner may be liable for more than h— individual investment in the limited partnership.
Limitation on Allocations and Distributions to General Partners
Notwithstanding Article X, the general partners shall not receive any share of profits or distribution of capital until such time as a limited partner has been returned h— investment through a combination of profits and losses. For the purpose of this computation, the capital contribution of a limited partner shall be considered to be $_____. From this amount, 100% of the profits distributed to a person making such a capital contribution and 50% of the losses shall be deducted.
Assignment of Partners' Interests
(a). General partners. No general partner may assign, mortgage, encumber, or sell all or a portion of h— interest as general partner to anyone other than another general partner or limited partner. The transferee shall be a general partner to the extent of the interest transferred.
(b). Limited partners. A limited partner's right to receive any income from the limited partnership may not be transferred without the prior, written consent of the general partners, who may not unreasonably withhold such consent. A limited partner may not transfer all or a portion of h— capital interest unless —he first gives the other limited partners the opportunity to purchase the interest at its fair market value, as determined by the general partners. The limited partners shall have _________ days to purchase the interest.
Compensation for General Partners
In addition to receiving a share of net profits, as provided in Article X, the general partners are entitled to a management fee equal to _____% of the value of the assets listed on the year-end balance sheet of the limited partnership, prepared in accordance with generally accepted accounting principles, but in calculating the value of the assets for the purpose of determining the management fee, there shall be no reduction for accumulated depreciation.
Partnership funds shall be deposited in such bank or banks as the general partners select. All withdrawals shall be made with checks signed by a general partner or h— authorized agent.
Books and Records
The limited partnership shall maintain its books and records at its principal place of business or such other place as designated by the general partners. The books and records shall be available for reasonable inspection by any partner or a partner's authorized representative. At the end of each calendar year, the general partners shall choose a certified public accountant to make a certified audit of the books and distribute to the limited partners a full and detailed statement of business operations during the year. Each partner has the right to conduct, at h— own expense, a private audit of the books and records if —he does so at a reasonable time and after notifying the general partners, but not more often than once in 18 months.
Termination of Limited Partnership
The limited partnership shall terminate upon the happening of any of the following events:
(a). Sale of all or substantially all of the partnership assets.
(b). The death, bankruptcy, retirement, or adjudication of insanity or incompetence of the last remaining general partner.
(c). The insolvency or bankruptcy of the limited partnership.
(d). Agreement by limited partners entitled to _____% or more of the profits of the limited partnership that the limited partnership shall terminate.
Distribution on Dissolution
After the termination of the limited partnership, the general partners or, if paragraph (b) of Article XVI applies, the limited partners shall liquidate the partnership property and apply the proceeds in the following order of priority:
(a). To creditors (except limited partners on account of their contributions and general partners) in the order of their priority as provided by law.
(b). To partners as follows:
(1). _____% to the general partners in accordance with the percentages set forth in Exhibit I.
(2). _____% to the limited partners in accordance with the percentages set forth in Exhibit II.
Power of Attorney
Each of the limited partners by this agreement constitutes and appoints _________, general partners, as h— true and lawful attorneys with the power to make, execute, sign, acknowledge and file in h— name, place, and stead a certificate of limited partnership under the laws of the State of _________, and a certificate of conducting business under an assumed name, and to execute such other instruments as may be required under the laws of the State of _________, and any amendments to the foregoing.
Death, Retirement or Incompetency of General Partner
When a general partner dies, retires, or is adjudicated insane or incompetent, —he, h— personal representative, or guardian shall be paid the amount the general partner would have received had the limited partnership been liquidated at that time. After such payment is made, the interests of the remaining general partners and the limited partners shall be adjusted in accordance with Exhibits I and II.
Death or Incompetency of Limited Partner
When a limited partner dies or is adjudicated insane or incompetent, h— personal representative or guardian shall succeed to the rights of the limited partner.
All notices provided for in this agreement shall be sent by registered or certified mail to the parties at the addresses set forth in Exhibit III.
This agreement shall be binding upon and shall inure to the benefit of the heirs, executors, administrators, successors, and assigns of the partners.
Any controversy arising in relation to this agreement shall be settled by arbitration in the City of _________ pursuant to the then applicable rules of the American Arbitration Association.
This agreement may be executed in counterparts, each of which shall constitute an original of it.
The accounting year of the limited partnership shall be the calendar year.
This agreement may be amended with the consent of limited partners entitled to _____% or more of the profits of the limited partnership.
All expenses required for the formation of the limited partnership shall be paid by the limited partnership.
This agreement constitutes the final written expression of the parties' agreement, and any statements, oral or written, that differ from the terms of this agreement shall have no effect.
In witness of which, the parties have executed this agreement _________[date].