When drafting a limited partnership agreement, the initiating partner should clearly distinguish the roles and responsibilities of general partners versus limited partners, ensuring clarity on management authority and liability.
Define capital contributions, profit and loss allocations, and distribution schedules to establish financial transparency and protect both general and limited partners’ interests.
It is advisable to include provisions on partner withdrawals, admission of new partners, and dispute resolution mechanisms, as well as compliance with state partnership laws to enhance enforceability.