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Limited partnership in USA and Uk - Essay Example

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They are established by two or more people with a similar business idea and/or objectives. At least one person has to be a general partner; has personal liability and management authority. In addition to the…
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Limited partnership in USA and Uk
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Download file to see previous pages In both countries, the formation of a limited partnership is between two or more persons with the same business objective. The general idea behind a limited partnership is that; there is at least one partner who will bear the full burden of the partnership’s debt, while at least one partner will be dormant. The dormant partner will only bear a portion of the partnership’s debt; that is, up to his/her contribution to the partnership’s capital. Limited partners shall not have any managerial authority. The UK law on limited partnership sets out some clear restrictions on the passive partners. These partners shall not (Osborne, 2002):
If the limited partners fail to adhere to the above restrictions, they shall bear all the debts of the business up to the amount drawn out, while participating in the management of the company. The UK company law makes it clear that one cannot be both a general partner and a limited partner at the same time. Any individual or a legal body can become a partner in a limited partnership, either as a general partner or as a limited partner.
Both countries require that a limited partnership be registered to ensure that it is not for fraudulent activities. In the UK, all partners in a limited partnership are equally liable for any debts incurred until registration (Osborne, 2002). In Saudi Arabia, joint partnerships will only be considered as legal after registration. Every joint partnership formed and registered under the country’s company law shall be regarded as a Jordanian corporate institution.
According to the article (42) of company law; a partnership address should only consist of the general partners’ names. If a limited partner’s name is mentioned in the address, he/she ceases to be a passive partner. He/she becomes a general partner with the full responsibility of the business’ liabilities. The appropriate name should ...Download file to see next pagesRead More
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