The Traditional Limited Partnership

The Traditional Limited Partnership

The history of limited partnerships may be traced to medieval Europe where a society comandita was developed primarily to permit the nobility and the Church to quietly invest wealth in mercantile enterprises. In England and the United States, limited partnerships were first authorized by statute in the late nineteenth and early twentieth centuries. Today, the limited partnership form of business is exclusively a creature of statute ； in the absence of statute (or the failure to comply with the mandatory provisions of the applicable statute)，all partners are general partners no matter what their private understanding is or how they are designated in the partnership agreement or held out to the public. Thus, there is no general common law of limited partnerships as there is a common law of general partnerships，and limited partnerships are not a default form of business.

During most of the twentieth Century,the law of limited partnership [in the United States] was based on the Uniform Limited Partnership Act of 1916,which,the Uniform Partnership Act of 1914, achieved virtually universal acceptance. There are internal indications that ULPA (1916) was prepared acceptance. There are internal indications that ULPA( 1916) was prepared on the assumption that the traditional limited partnership was a small local business that desired to raise capital from local risk - adverse investors. What comes to mind is a local hardware store in a small town with two general partners and two or three limited partners，perhaps bankers or other persons substances in the community，who are willing to invest the necessary capital for the hardware store to operate in exchange for a share of its profits but who are unwilling to assume the risk of personal liability for the hardware store’s debts. A major emphasis of ULPA (1916) was to ensure that creditors of the hardware store not be misled as to who was responsible for partnership obligations.