What Is A Limited Partnership?

Starting a business could be a painful process if you’re not too sure about how to go about the whole thing. Of course, there is always the possibility of hiring a consultant to help you get through this difficult stage of your start-up. However, it is always better to know a little bit about your options before you decide on the form of the entity that you are going to start. The choices available to you are sole proprietorship, partnership, private limited company, public limited company, etc. If you are planning to work on creating a partnership, you have two choices a general or a limited one. What is a limited partnership – since this is a question that many people have been asking in the recent past, we thought it would be a good idea to explain the salient features of this business entity and how you could find it beneficial when you think of starting a business.

Regulations

Irrespective of where you start your limited partnership, there are many rules and regulations that have to be followed especially at the time of commencement. You will have to submit details of the various people who are part of the organization; here it is the partners who have to be listed out. Details of their names, addresses, dates of birth, and in some cases their qualifications are required to be put down. You also have to ensure that the agreement between the partners which is enshrined in the partnership deed, is submitted as well. All these documents are scrutinised by a competent authority who will probably come back to you if they have any queries regarding either the partners or the business that you propose to start. Once you have all signed the papers and have agreed on a profit-sharing ratio, which of course would be mentioned in the partnership deed, you can commence business operations.

Is It Expensive?

There is certainly a cost to be factored in while commencing a business. Though these are costs that you can expect to pay whether it is a limited or a general partnership, it is essential for you to put all these projections of cost in the overall budget that you make. Depending on the state in which you have decided to start your business, there could be changes in the initial payments that you have to pay to make, towards registration charges. Make sure that you get to know about the other regular payments to be made as well.