Entity to be registered: partnerships: definition of a limited partnership
A limited partnership is a partnership, which consists of
- one or more ‘general partners’ who are liable for all debts and obligations of the firm
- one or more ‘limited partners’ who, at the time of entering into the partnership, contribute a sum as capital and are not liable for the debts and obligations of the firm beyond the amount contributed.
The Limited Partnership Act 1907, section 5 requires that every limited partnership must be registered with the Registrar of Companies (Companies House). This means that, if a limited partnership is not registered with the Registrar of Companies, all the partners should be treated as general partners and the partnership should be registered as a normal partnership. The certificate of registration issued by the Registrar may be called for in order to substantiate the applicant’s status.
Under the Limited Partnership Act 1907, section 6(1), limited partners are permitted to examine the books of the firm and to offer advice. However, they are prevented by the Act from taking any part in the management of the firm: if they do, they should be treated as general partners by default.