Also known as: partnerships in commendam · limited partnership · société en commandite
Written by attorneys · grounded in primary & secondary sources — see below
A partnership structure derived from civil law in which one or more general partners manage the business and bear unlimited personal liability while one or more limited partners contribute capital, take no part in management, and risk only the amount of their investment.
Philip Powell and Paula Pierce form a partnership in commendam to operate a logistics venture. They file formation documents listing the entity as Powell Pierce Ventures without any required abbreviation. The secretary of state rejects the filing because the name fails to include the phrase limited partnership or the abbreviation LP.
Patricia Patel contributes capital to a partnership in commendam at the moment of formation. The founding agreement lists her as a limited partner from the outset. She acquires that status immediately upon the entity's creation as agreed by the initial partners.
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Preston Pratt and Pulse Media create a partnership in commendam. Their agreement specifies voting rights on major decisions and profit allocations. Those provisions control the relations among the partners and between the partners and the entity.
Paige Porter invests as a limited partner in a partnership in commendam that later incurs a large supplier debt. Creditors attempt to collect directly from her personal assets. The claim fails because her status as a limited partner alone does not create personal liability for the entity's obligations.
Prime Logistics, a partnership in commendam formed in Delaware, faces an internal dispute over capital calls. A court in another state applies Delaware law to resolve the partners' rights. The choice-of-law rule directs that the state of formation governs relations among the partners.
Precision Tools, a partnership in commendam, retains an accounting firm whose audit report reaches investors. A limited partner later sues the firm for negligence in the audit. The court examines whether the firm owed a duty directly to the limited partner under applicable tort standards.
In a partnership in commendam, limited partners risk only their investment and may not manage the business, while general partners retain unlimited liability and control. This structure allows passive investment without full personal risk.
The name must include the phrase limited partnership or the abbreviation LP and may not use limited liability limited partnership or LLLP. The filing will be rejected if these rules are not followed.
A person becomes a limited partner upon formation as agreed by the initial partners. After formation, additional limited partners may be admitted as provided in the partnership agreement.
A limited partner is not personally liable for the debts of the partnership solely by reason of being a limited partner, even if the limited partner participates in management. This protection applies regardless of the partnership's dissolution.
…Revlon.[^maj-1] The defendants are Revlon, its board of directors, and Forstmann Little & Co. and the latter’s affiliated limited partnership (collectively, Forstmann). The injunction barred consummation of an option granted Forstmann to purchase certain Revlon assets (the lockup option), a promise by Revlon to deal exclusively…