A limited partnership is a legal entity with at least one general partner (who manages the fund and bears unlimited liability) and one or more limited partners (who invest capital and have liability limited to their commitment).
Why It Matters
The limited partnership is the default structure for private equity, venture capital, and hedge funds. It provides the governance framework, liability protection, and tax treatment that institutional investors expect. If you are raising a fund from professional allocators, they will assume an LP structure unless told otherwise.
Key Details
- Governed by state limited partnership statute, most commonly the Delaware Revised Uniform Limited Partnership Act (DRULPA).
- The GP owes fiduciary duties to the LPs, including a duty of care and a duty of loyalty.
- LPs risk losing their limited liability protection if they participate in the management or control of the fund.
- Formation requires filing a Certificate of Limited Partnership with the state, along with execution of a limited partnership agreement among the partners.
For a deeper look at how fund entities fit together, see the Fund Formation and Structure Guide.
Capital Company handles entity formation support as part of fund administration, including coordination with counsel on partnership filings and ongoing state compliance.
This content is for informational purposes only and does not constitute legal, tax, or compliance advice. Consult qualified counsel for guidance specific to your situation.