Fillable Printable Limited Partnership Agreement
Fillable Printable Limited Partnership Agreement
Limited Partnership Agreement
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LIMITED PARTNERSHIP AGREEMENT
This Agreement of Limited Partnership is made effective as of _______________, by and
between _______________ (hereinafter referred to as "General Partner"), and _____________,
_______________, _______________ and _______________ (hereinafter individually referred
to as "Limited Partner" and collectively referred to as "Limited Partners").
IT IS HEREBY AGREED:
ARTICLE I
THE PARTNERSHIP
1.1 Name of Partnership. The name of the Partnership shall be "________________,
a California Limited Partnership." The business of the Partnership shall be conducted under that
name.
1.2 Purpose of Partnership. The Partnership shall engage in the business of
___________________________ and such activities as are related or incidental thereto.
1.3 Principal Place of Business. The principal executive office of the Partnership
shall be at ______________________________, or at such other place as may be determined
from time to time by the General Partner. If the General Partner changes the executive office of
the Partnership, he shall give written notice of the change of address to each Limited Partner at
least thirty (30) days before that change.
1.4 Term of Partnership. The term of the Partnership commenced on _____________
and shall continue for a period of thirty (30) years unless sooner dissolved as hereinafter
provided.
1.5 Certificate of Limited Partnership. The General Partner shall immediately
execute a Certificate of Limited Partnership and cause that Certificate to be filed in the office of
the Secretary of State of California. Thereafter, the General Partner shall execute and cause to be
filed certificates of amendment of the Certificate of Limited Partnership whenever required by
the California Revised Limited Partnership Act or this Agreement.
1.6 Glossary of Terms. Except as otherwise stated in this Agreement or as the
context of this Agreement requires, the terms defined in this Section shall, for the purposes of
this Agreement, have the meanings herein specified.
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A. "Agreement" shall mean this Limited Partnership Agreement, as amended
from time to time.
B. "Assignee" shall mean a person who has acquired beneficial interest in the
limited partnership interest of a Limited Partner but who is not a "Substituted Limited Partner."
C. "Assigning Partner" shall mean a Partner who has assigned a beneficial
interest in that Partner's partnership interest, the Assignee of which has not become a
"Substituted Limited Partner."
D. "Limited Partner" shall refer to any person who is admitted to the
Partnership, either as an Original Limited Partner or as a Substituted Limited Partner.
E. "Net income" and "net loss" shall mean the net income or net loss of the
Partnership as determined for the purpose of computing federal income taxes pursuant to the
Internal Revenue Code.
F. "Partners" or "the Partners" shall refer collectively to the General Partner
and the Limited Partners. Reference to "Partner" shall be a reference to each of the Partners.
G. "Partnership" shall refer to the Limited Partnership created under this
Agreement and the Certificate of Limited Partnership to be filed with the Office of the Secretary
of State pursuant to the California Revised Limited Partnership Act.
ARTICLE II
MEMBERS OF PARTNERSHIP
2.1 Original General Partners. The name of the General Partner is ______________.
2.2 Original Limited Partners. The names of each original Limited Partner are as
follows:
2.3 Admission of Additional General Partners. Subject to any other provision of this
Agreement, and the Acquisition and Loan Documents, a person may be admitted as a General
Partner after the Certificate of Limited Partnership is filed only with the written consent of each
General Partner and the vote or written consent of fifty-one percent (51%) of all Partners.
2.4 Admission of Additional Limited Partners. Subject to the provisions of Article IX
of this Agreement, governing transfers of Partnership interests, a person may acquire an interest
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in the Partnership directly from the Partnership and be admitted as an Additional Limited Partner
only with the approval of the General Partner and fifty-one percent (51%) of all Partners. Each
Partner's interest will be proportionally reduced to admit the new Limited Partner.
2.5 Admission of Substituted Limited Partner. The assignee of a limited partnership
interest may be admitted as a Substituted Limited Partner only with the written consent of the
General Partner.
2.6 Additional Partners Bound by Agreement. Before any person is admitted to the
Partnership as a General or Limited Partner, that person shall agree in writing to be bound by all
of the provisions of this Agreement.
ARTICLE III
FINANCING
3.1 Capitalization. The Partnership shall have a total initial capitalization of up to
One Million Two Hundred Fifty Thousand Dollars ($1,250,000). Each Partner shall contribute
the sum of Twelve Thousand Five Hundred Dollars ($12,500) for each one percent (1%) interest
in the Partnership. The General Partner and Limited Partners shall initially contribute the
amounts set forth opposite their respective names on Exhibit A.
3.2 Additional Capital Contributions.
A. The General Partner may determine the amount of additional capital
required by the Partnership and may require each Partner, General and Limited,1 to contribute a
proportionate share of additional capital to the Partnership. The General Partner's determination
will be binding on all Partners, unless fifty-one percent (51%) of all Partners vote otherwise.
Each Partner's proportionate share of additional capital shall be defined as the product of the total
amount of additional capital required by the Partnership multiplied by that Partner's "percentage
interest in profits and losses" as set forth in Exhibit A. Additional capital contributions shall be
made in cash by each Partner to the Partnership within ten (10) days after written notice of the
amount of additional capital contributions has been delivered to each Partner (said notice
hereinafter referred to as "Call Notice").
B. In the event that any Partner fails to contribute any additional capital
contribution required hereunder within ten (10) days after the Call Notice, then that Partner shall
be in default under this Agreement. Any Partner who is in default under this Agreement for
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failing to contribute the additional capital contributions required hereunder shall have ninety (90)
days from the date of delivery the Call Notice in which to cure that default by contributing his
share of the required additional capital contributions and by paying to the non-defaulting
Partners, in proportion to their percentage interests in profits and losses, an amount equal to one
percent (1%) of the defaulting Partner's additional capital contribution for each day he has failed
to contribute such additional capital contributions commencing with the eleventh (11th) day after
delivery of the Call Notice, as liquidated damages.
By initialing hereunder each Partner specifically agrees to pay any such liquidated
damages which may become due as a result of his default hereunder and further agrees that these
damages constitute a reasonable estimate of the amount of actual damages which may be
suffered by the other Partners.
Initials:
So long as a Partner is in default hereunder, he shall have no voting rights but shall
receive notice of any meetings.
C. If any Partner is in default under Subsection 3.2B hereunder and fails to
cure the default within ninety (90) days of the Call Notice by contributing the additional required
capital and by paying the liquidated damages as above provided, then such Partner shall be in
breach of this Agreement.
D. If any Partner is in breach of this Agreement pursuant to
Subsection 3.2(c), then at the option of the Partnership, his interest in the Partnership shall be
terminated and he shall become an unsecured creditor for an amount equal to his original capital
contribution decreased by the sum of:
1. his proportionate share of all losses previously incurred by the
Partnership (excluding depreciation);
2. the liquidated damages accruing to the other Partners under
Subsection 3.2(b); and
3. by any distributions previously made to said defaulting Partner.
This debt shall be evidenced by an unsecured promissory note executed in the name of
the Partnership and shall be payable with interest at the rate of nine percent (9%) in sixty (60)
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equal monthly installments, interest included. If the Partnership sells the Project, then this note
shall be all due and payable.
E. If any Partner is in breach of this Agreement pursuant to
Subsection 3.2(c), and if he has a deficit balance in his capital account, then, at the option of the
Partnership, his interest in the Partnership shall be terminated and he shall pay an amount equal
to the deficit balance in his capital account (computed without regard to depreciation) to the
Partnership within thirty (30) days after date of the breach. If payment is not made within said
thirty (30) day period, interest shall accrue thereafter at eighteen percent (18%) per annum or the
highest legal rate under California law until paid in full. If any former Partner fails to pay the
amount due to the Partnership pursuant to this Subsection 3.2(e), the Partnership or any
individual Partner may proceed with action for collection.
F. As an alternative to terminating the Partner's interest as provided in
Subsections 3.2(d) or 3.2(e), the Partnership may elect to sue for breach of this Partnership
Agreement. By initialing hereunder, the Partners acknowledge and agree that the terms and
provisions of Subsections 3.2(d) and 3.2(e) are fair and reasonable and agree to be bound by the
terms thereof. Each Partner hereby waives the requirement that a dissolution and accounting
must occur before an action may be maintained by a Partner or the Partnership against a Partner.
Initials:
3.3 Interest in Contributions. No interest shall be paid on a Partner's capital
contributions.
3.4 Withdrawal and Return of Capital.
A. No Partner may withdraw any portion of the capital of the Partnership and
no Partner shall be entitled to the return of that Partner's contribution to the capital of the
Partnership except upon dissolution of the Partnership.
B. No Partner shall be entitled to demand the distribution of Partnership
property other than cash as part of the return of that Partner's capital account on dissolution.
C. No Partner shall have a priority over any other Partner as to the return of
his capital account upon the dissolution of the Partnership.
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ARTICLE IV
ALLOCATION AND DISTRIBUTION OF PROFITS AND LOSSES
4.1 Allocation of Profits and Losses. The net income of the Partnership shall be
allocated to, and any net losses suffered by the Partnership shall be borne by, the Partners in the
proportions set forth in Exhibit A attached hereto and incorporated herein by this reference.
4.2 Distribution of Cash Available for Distribution. The General Partner shall
determine the amount of any distribution to the Partners and the timing of all such distributions.
The General Partner's determination shall be binding upon all Partners.
4.3 Priorities Among Partners. No Partner shall be entitled to any priority or
preference over any other Partner as to any distribution from the Partnership.
ARTICLE V
MANAGEMENT OF PARTNERSHIP AFFAIRS AND VOTING RIGHTS
5.1 Control and Management. Except as otherwise set forth in this Agreement, the
General Partner shall have sole and exclusive control of the Limited Partnership. The General
Partner shall have the power and authority to take such action from time to time as he may deem
to be necessary, appropriate, or convenient in connection with the management and conduct of
the business and affairs of the Partnership, including without limitation the power to:
A. Acquire property, including real or personal property, for the use of the
Partnership upon such terms and conditions as the General Partner may, from time to time,
determine to be advantageous to the Partnership;
B. Finance the Partnership's activities by borrowing money from third parties
on such terms and under such conditions as the General Partner deems appropriate. When
money is borrowed for Partnership purposes, the General Partner shall be, and hereby is,
authorized to pledge, mortgage, encumber, or grant a security interest in Partnership properties as
security for the repayment of such loans.
C. Employ, retain, or otherwise secure the services of such personnel or firms
deemed necessary by the General Partner for or to facilitate the conduct of Partnership business
affairs, all on such terms and for such consideration as the General Partner deems advisable; and\
D. Take any and all other action which is permitted by law and which is
customary in or reasonably related to the conduct of the Partnership business or affairs.
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5.2 Voting Rights of Limited Partners.
A. Except as provided in Subsection 5.2(b), the Limited Partners shall not
have either the obligation or the right to take part, directly or indirectly, in the active
management or control of the business of the Partnership.
B. The following Partnership actions may only be taken after approval by
vote of the Partners:
1. Veto of a call for additional capital as set forth in Section 3.2;
2. Admission of an additional General Partner under Section
3. Admission of an additional Limited Partner under Section 2.4;
4. Admission of a Substituted General Partner under Section 9.2;
5. Amendment of the Partnership Agreement as provided in
Subsection 13.2;
6. The sale or transfer of the Project;
7. Approval of Partner loans pursuant to Section 7.3;
8. Consent to dissolution under Section 12.2; and
9. Election of a new general partner under Section 12.3.
C. Except where otherwise expressly set forth in this Agreement, all of the
acts listed in Section 5.2(b)(i) through 5.2(b)(ix) shall be approved by fifty-one percent (51%)
vote of the interests of the Partners, each Partner having one vote for each one percent (1%)
interest in profits and losses owned by that Partner with the General Partner having the same
voting rights as a Limited Partner.
5.3 Standard Care of General Partner. The General Partner shall exercise ordinary
business judgment in managing the affairs of the Partnership. Unless fraud, deceit, or a wrongful
taking is involved, the General Partner shall not be liable or obligated to the Limited Partners for
any mistake of fact or judgment made by the General Partner in operating the business of the
Partnership that results in any loss to the Partnership or its Partners. The General Partner does
not, in any way, guarantee the return of the Limited Partners' capital or a profit from the
operations of the Partnership. The General Partner shall not be responsible to any Limited
Partner because of a loss of that Partner's investment or a loss in operations, unless it has been
occasioned by fraud, deceit, or a wrongful taking by the General Partner.
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5.4 Removal of General Partner. The General Partner may not be removed by the
Limited Partners.
ARTICLE VI
BOOKS, RECORDS, AND ACCOUNTS
6.1 Partnership Accounting Practices.
A. The Partnership books shall be kept on a cash basis. The Partnership
books shall be closed and balanced at the end of each fiscal year of the Partnership.
B. The fiscal year-end of the Partnership shall be December 31.
6.2 Maintenance of Records and Accounts. At all times, the General Partner shall
maintain or cause to be maintained true and proper books, records, reports, and accounts in
which shall be entered fully and accurately all transactions of the Partnership.
6.3 Required Records. The General Partner shall maintain at the principal executive
office of the Partnership within California all of the following records:
A. A current list of the full name and last known business or residence
address of each Partner, set forth in alphabetical order, together with the contribution and share
in profits and losses of each Partner.
B. A copy of the Certificate of Limited Partnership and all Certificates of
Amendment thereto, together with executed copies of any powers of attorney pursuant to which
any such Certificate has been executed.
C. Copies of the Limited Partnership's federal, state, and local income tax or
information returns and reports, if any, for the six (6) most recent taxable years.
D. Copies of this Agreement and all duly adopted amendments thereto.
E. Financial statements of the Partnership for the six (6) most recent fiscal
years.
F. The Partnership's books and records for at least the current and past three
(3) fiscal years.
6.4 Delivery of Records to Limited Partners. Upon the request of any Limited
Partner, the General Partner shall promptly deliver to that Partner, at the expense of the
Partnership, a copy of:
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A. The current list of each Partner's name, address, contribution, and share in
profits and losses.
B. The Certificate of Limited Partnership, as amended, and any powers of
attorney pursuant to which any such Certificate was executed.
C. This Agreement, as amended.
6.5 Access to Records by Limited Partners. Each Limited Partner and/or each
Limited Partner's duly authorized representative, attorney, or attorney-in-fact shall have the right,
upon reasonable request, to:
A. Inspect and copy, during normal business hours, any Partnership records
the Partnership is required to maintain, pursuant to Sections 6.2 and 6.3 of this Agreement.
B. Obtain from the General Partner, promptly after becoming available, a
copy of the Limited Partnership's federal, state, and local income tax or information returns for
each year.
6.6 Income Tax Data. The General Partner shall send to each Partner, within ninety
(90) days after the end of each taxable year, a copy of the Partnership's federal, state, and local
income tax or information returns for such taxable year, together with such additional
information as is necessary for them to complete their federal and state income tax or
information returns for that year.
6.7 Capital Accounts. An individual capital account shall be maintained for each
Partner. A capital account shall consist of a Partner's contribution to the initial capital of the
Partnership, any additional contributions to the Partnership capital made by a Partner pursuant to
this Agreement, and any amounts transferred thereto from that Partner's income account pursuant
to this Agreement.
6.8 Income Accounts. An individual income account shall be maintained for each
Partner. At the close of each Partnership taxable year, or at more frequent intervals, each
Partner's share of the net profits or net losses of the Partnership shall be credited or debited to,
and that Partner's distributions received during each fiscal year shall be deducted from, that
Partner's income account and any resulting balance or deficit shall be transferred to or charged
against that Partner's capital account.
6.9 Banking. The General Partner shall open and thereafter maintain a separate bank
account in the name of the Partnership in which there shall be deposited all the funds of the
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Partnership. No other funds shall be deposited in the account. The funds in that account shall be
used solely for the business of the Partnership, and all withdrawals therefrom are to be made
only on checks signed by the General Partner.
ARTICLE VII
RIGHTS, DUTIES AND RESTRICTIONS OF PARTNERS
7.1 Devotion of Time by General Partner. The General Partner shall devote such
care, attention, and business capacity to the affairs of the Partnership as may be reasonably
necessary. In this connection, the Partners hereby acknowledge that any General Partner may be
the Manager or General Partner of other partnerships and may continue to manage other
partnerships, and may continue to engage in other related business, whether or not competitive
with the business of the Partnership.
7.2 Additional Compensation to General Partner.
A. Other than his share of profits and losses, the General Partner shall not be
entitled to any additional compensation for services rendered as General Partner.
B. __________________ shall be the project manager and shall receive a fee
equal to five percent (5%) of the total "Construction Costs" of the apartments pursuant to a
separate written agreement. "Construction Costs" are fully defined in the separate agreement,
but by way of explanation, shall include all hard and soft costs incurred in connection with the
construction of the apartments. By way of example and not by way of limitation, construction
costs shall include paints, permits, fees and insurance as well as the cost of materials and labor.
C. It is acknowledged by all Partners that __________________ is an
affiliate of __________________.
D. From the five percent (5%) fee __________________ shall pay the costs
of any supervisor and of any secretary.
7.3 Loans to the Partnership. No Partner shall loan any money to the Partnership
unless approved by a fifty-one percent (51%) vote of all Partners.
7.4 Transaction of Business with Partnership. Except as otherwise provided in this
Agreement, a Partner may transact other business with the Partnership. If any Partner transacts
business with the Partnership, that Partner shall have the same rights and obligations with respect
thereto as a person who is not a Partner.
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7.5 Partners Engaging in Other Business. Any of the Partners may engage in or
possess an interest in other business ventures of every nature and description independently or
with others, and neither the Partnership nor the Partners shall have any right by virtue of this
Agreement in and to any such independent ventures or to the income or profits derived
therefrom.
ARTICLE VIII
PARTNERSHIP MEETINGS
8.1 Call and Place of Meetings. Meetings of the Partners at the Principal Executive
Office of the Partnership may be called pursuant to the written request of any Partner.
8.2 Notice of Meeting. Immediately upon receipt of a written request stating that the
Partner or Partners request a meeting on a specific date (which date shall not be less than ten (10)
nor more than sixty (60) days after the receipt of the request by the General Partner), the General
Partner shall immediately give notice to all Partners. Valid notice may not be given less than ten
(10) nor more than sixty (60) days prior to the date of the meeting, and shall state the place, date,
and hour of the meeting and the general nature of the business to be transacted. No business
other than the business stated in the notice of the meeting may be transacted at the meeting.
Notice shall be given by mail, addressed to each Partner entitled to vote at the meeting at the
address appearing in the books of the Partnership for the Partner.
8.3 Quorum. At any duly held or called meeting of Partners, Partners holding at least
fifty-one percent (51%) of the voting power who are represented in person or by proxy shall
constitute a quorum for all purposes other than amending this Agreement in which case seventy-
five percent (75%) of the interests of all Partners shall be required. The Partners present at a
duly called or held meeting at which a quorum is present may continue to transact business until
adjournment, notwithstanding the withdrawal of enough Partners to leave less than a quorum, if
any action taken, other than adjournment, is approved by the requisite percentage of interests of
Partners.
8.4 Meetings Not Duly Called, Noticed, or Held. The transaction of business at any
meeting of Partners, however called and noticed, and wherever held, shall be as valid as though
consummated at a meeting duly held after regular call and notice, if a quorum is present at that
meeting, either in person or by proxy, and if, either before or after the meeting, each of the
