What Is a Wyoming Limited Partnership Agreement?
A Wyoming limited partnership must consist of one or more general partners and one or more limited partners. General partners have unlimited liability for company debts and obligations, as well as full control over the company's day-to-day affairs. Limited partners have no personal obligation for company debts and obligations and do not participate in company's business activities. A Wyoming limited partnership agreement must contain information such as the roles, authority and responsibilities of the company's partners.
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Significance
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A Wyoming limited partnership agreement establishes the rules and regulations that govern the partners of the business. A Wyoming limited partnership agreement can be written or oral, but it is advisable to create a written partnership agreement to help the partners avoid disputes and conflicts. In the absence of a partnership agreement, a Wyoming limited partnership is subject to Wyoming state rules. The partnership agreement of a Wyoming limited partnership cannot reduce a partner's duty of care, or eliminate a partner's duty of loyalty. This means the partners of the business must avoid activities that appear as a conflict of interest and always act in the best interest of the company.
Management
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The agreement needs to contain specific information as to the rights, powers and liabilities of the Wyoming limited partnership's general partners. Also, the partnership agreement should include information regarding the rights, powers and liabilities of the Wyoming limited partnership's limited partners. General partners have a fiduciary duty to the company's limited partners, since the general partners have sole control over the company's business activities. The Wyoming limited partnership agreement needs to describe the process general partners use to make company decisions. A Wyoming limited partnership agreement may include a limited partner's right to vote on the dissolution of the company.
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Financial Information
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The financial contribution of each partner needs to appear in the Wyoming limited partnership agreement. Partners of a Wyoming limited partnership may contribute services, cash or property to the business. The limited partnership agreement needs to explain the way the Wyoming limited partnership divides profits and losses between the company's partners. In the absence of a Wyoming limited partnership agreement, the partners have to split profits and losses according to their ownership share of the business. The limited partnership agreement may contain information regarding a partner's right to transact business with the Wyoming limited partnership, such as lending money to the company.
Considerations
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A Wyoming limited partnership agreement cannot eliminate a partner's right to view the company's financial records. The agreement cannot prevent a partner from withdrawing from the business, as long as he provides written notification. A Wyoming limited partnership agreement can contain information regarding the company's ability to recover damages from a partner when her withdrawal violates the terms of the partnership agreement. The compensation due to a departing partner needs to appear in the Wyoming limited partnership agreement, along with procedures for accepting new partners into the business.
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