Illinois limited partnership agreement template

Illinois Limited Partnership Agreement

This Illinois Limited Partnership Agreement (the "Agreement") is made and entered into as of [Date], by and among the parties listed below.

1. Parties

• General Partner(s):
  • [Name of General Partner 1], residing at [Address of General Partner 1], with phone number [Phone Number of General Partner 1] and email address [Email of General Partner 1].
  • [Name of General Partner 2], residing at [Address of General Partner 2], with phone number [Phone Number of General Partner 2] and email address [Email of General Partner 2].
• Limited Partner(s):
  • [Name of Limited Partner 1], residing at [Address of Limited Partner 1], with phone number [Phone Number of Limited Partner 1] and email address [Email of Limited Partner 1].
  • [Name of Limited Partner 2], residing at [Address of Limited Partner 2], with phone number [Phone Number of Limited Partner 2] and email address [Email of Limited Partner 2].

2. Formation and Name

• The parties hereby form a limited partnership under the laws of the State of Illinois, pursuant to the Illinois Uniform Limited Partnership Act (805 ILCS 215/101 et seq.).
• The name of the limited partnership shall be [Partnership Name] (the "Partnership").

3. Purpose and Scope

• The purpose of the Partnership is to engage in the following business: [Description of Business Purpose]. The Partnership shall only engage in activities related to this purpose and shall comply with all applicable regulatory and licensing requirements in Illinois.
• The Partnership's principal place of business shall be located at [Street Address], Illinois.
• The registered agent of the Partnership in Illinois is [Registered Agent Name], located at [Registered Agent Address].

4. Term

• Option A: The term of the Partnership shall commence on the date of this Agreement and shall continue in perpetuity unless sooner terminated as provided herein.
• Option B: The term of the Partnership shall commence on the date of this Agreement and shall continue for a period of [Number] years, expiring on [Date], unless sooner terminated as provided herein.

5. Capital Contributions

• Initial Contributions:
  • General Partner 1: [Dollar Amount] in cash/[Description of Property]/services valued at [Dollar Amount].
  • General Partner 2: [Dollar Amount] in cash/[Description of Property]/services valued at [Dollar Amount].
  • Limited Partner 1: [Dollar Amount] in cash/[Description of Property]/services valued at [Dollar Amount].
  • Limited Partner 2: [Dollar Amount] in cash/[Description of Property]/services valued at [Dollar Amount].
• All initial contributions must be made by [Date].
• Future Contributions (Capital Calls):
  • Option A: The General Partners may make capital calls for additional funds as needed, subject to a vote of [Percentage] of the partners (based on percentage of ownership).
  • Option B: No future capital contributions shall be required of any partner.
• Remedies for Non-Contribution:
  • Option A: If a partner fails to make a required capital contribution, the other partners may loan the amount to the defaulting partner, with interest at [Interest Rate]%.
  • Option B: If a partner fails to make a required capital contribution, the other partners may reduce the defaulting partner’s ownership percentage proportionally.

6. Capital Accounts

• A capital account shall be maintained for each partner. Each partner's capital account shall be credited with the partner's contributions and share of profits, and debited with the partner's distributions and share of losses.

7. Allocation of Profits and Losses

• Option A: Profits and losses shall be allocated among the partners in proportion to their respective percentage of ownership in the Partnership.
• Option B: Profits and losses shall be allocated as follows:
  • General Partner 1: [Percentage]%
  • General Partner 2: [Percentage]%
  • Limited Partner 1: [Percentage]%
  • Limited Partner 2: [Percentage]%
• Tax Allocations shall comply with IRC Section 704.

8. Distributions

• Distributions shall be made at the discretion of the General Partners, subject to the following priorities:
  • First, to repayment of any partner loans.
  • Second, to partners in proportion to their ownership percentage.

9. Management

• The General Partners shall have full authority over the day-to-day and extraordinary matters of the Partnership.
• Limited Partners shall not participate in the management or control of the Partnership, and their liability shall be limited to their capital contributions as per Illinois law.
• Major Decisions (e.g., merger, sale of assets, incurring debt) require approval by [Percentage]% of the General Partners and [Percentage]% of the Limited Partners.
• Meetings:
  • Regular meetings shall be held [Frequency, e.g., Quarterly].
  • Special meetings may be called by any General Partner with [Number] days' notice.
  • Quorum: [Percentage]% of the General Partners and [Percentage]% of the Limited Partners.
  • Voting methods: In person, by proxy, or remotely.

10. Books and Records

• The Partnership shall keep accurate and complete books and records at its principal office in Illinois.
• The fiscal year of the Partnership shall end on [Date].
• Partners shall have access to the Partnership's books and records during normal business hours.
• The Partnership shall provide partners with annual financial statements and K-1s.

11. Admission of New Partners

• Admission of a new General Partner requires unanimous consent of the existing General Partners and [Percentage]% consent of the Limited Partners. Filing with the Illinois Secretary of State is required.
• Admission of a new Limited Partner requires consent of the General Partners.
• New partners must execute a counterpart to this Agreement.

12. Transfer of Partnership Interests

• Option A: No partner may transfer their partnership interest without the unanimous consent of the other partners.
• Option B: A partner may transfer their partnership interest with the consent of the General Partners, subject to a right of first refusal in favor of the other partners. The transferee must meet reasonable qualifications.
• Transfers must comply with applicable Illinois laws and regulations.

13. Withdrawal and Expulsion

• Voluntary Withdrawal:
  • Option A: A partner may withdraw from the Partnership with [Number] months' written notice to the other partners.
  • Option B: A partner may not voluntarily withdraw from the Partnership.
• Expulsion: A partner may be expelled for material breach of this Agreement or other cause, subject to a vote of [Percentage]% of the other partners.
• Withdrawal or expulsion may trigger a buyout as outlined in Section 14.

14. Buy-Sell Provisions

• Triggering Events: Death, disability, bankruptcy, or material breach.
• Valuation Methodology: [Description of Valuation Method, e.g., independent appraisal].
• Payment Terms: [Description of Payment Terms, e.g., installment payments].

15. Liability and Indemnification

• Limited Partners' liability is limited to their capital contributions, provided they do not participate in the control of the Partnership’s business, in accordance with Illinois law.
• The Partnership shall indemnify the General Partners against any liabilities arising from their management of the Partnership, except for acts of gross negligence or willful misconduct.
• The Partnership shall maintain appropriate insurance coverage for liability risks.

16. Dispute Resolution

• The parties shall attempt to resolve any disputes through internal negotiation.
• If negotiation fails, the parties agree to submit the dispute to mediation in Illinois.
• If mediation fails, the parties agree to binding arbitration in Illinois, governed by the rules of the American Arbitration Association.
• The exclusive jurisdiction and venue for any actions arising under this Agreement shall be in the state courts of Illinois.

17. Dissolution and Winding Up

• The Partnership shall dissolve upon the occurrence of any of the following events:
  • The withdrawal of a General Partner (unless the remaining partners agree to continue the Partnership).
  • The sale of all or substantially all of the Partnership's assets.
  • The expiration of the Partnership's term (if applicable).
  • A court order.
• Upon dissolution, the assets of the Partnership shall be liquidated, and the proceeds shall be distributed in the following order:
  • To creditors of the Partnership.
  • To partners for repayment of loans.
  • To partners for return of capital contributions.
  • To partners in proportion to their respective ownership percentages.

18. Illinois Secretary of State Filings

• The General Partners shall be responsible for filing all necessary documents with the Illinois Secretary of State, including the Certificate of Limited Partnership, amendments, and dissolution filings.

19. Amendment

• This Agreement may be amended only by a written instrument signed by [Percentage]% of the General Partners and [Percentage]% of the Limited Partners. Any amendment requires mandatory filing with Illinois partnership records.

20. Ancillary Agreements

• The partners agree to execute any ancillary agreements necessary for the operation of the Partnership, including but not limited to intellectual property assignments, non-compete agreements, and confidentiality agreements.

21. Industry-Specific Regulations

• The Partnership shall comply with all applicable Illinois regulatory and licensing requirements specific to its industry, including but not limited to [List Applicable Regulations].

22. Insurance

• The Partnership shall maintain workers' compensation insurance (if applicable), liability coverage, and any bonding required by law or the Partnership's business.

23. Compliance with Laws

• The partners shall comply with all applicable federal, Illinois state, and local laws, including tax, labor, and environmental regulations.

24. Data Privacy and Cyber Liability

• The Partnership shall implement and maintain reasonable security measures to protect personal data and prevent cyberattacks, in compliance with applicable Illinois law.

25. Counterparts and Electronic Signatures

• This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Electronic signatures shall be valid and binding.

26. Governing Law

• This Agreement shall be governed by and construed in accordance with the laws of the State of Illinois, without regard to its conflict of laws principles.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

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[Name of General Partner 1], General Partner

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[Name of General Partner 2], General Partner

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[Name of Limited Partner 1], Limited Partner

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[Name of Limited Partner 2], Limited Partner