Limited partnerships (LPs) are a common investment vehicle in New Zealand. They are set up by two or more partners, where one partner (the general partner) has unlimited liability, while the other partner(s) (the limited partner(s)) have limited liability. This means that the limited partner(s) only risk losing the amount of money they invested in the partnership, while the general partner is liable for all the partnership`s debts and obligations.

A limited partnership agreement (LPA) is a legal document that outlines the terms and conditions of the partnership. It is a vital document that helps to ensure that all partners are on the same page and that the partnership operates smoothly. The LPA sets out the obligations and responsibilities of each partner, as well as the rules governing the partnership`s operation.

Some of the key provisions of an LPA include the following:

1. Capital Contributions: The LPA will specify how much capital each partner will contribute to the partnership. It will also outline the terms and conditions of any additional contributions that may be required in the future.

2. Profits and Losses: The LPA will outline how profits and losses are shared among the partners. This is critical to ensuring that all partners are compensated fairly for their contributions to the partnership.

3. Management: The LPA will specify who is responsible for managing the partnership and how decisions are made. This includes the appointment of the general partner and any other partners who are involved in the management of the partnership.

4. Limited Liability: The LPA will outline the limitations on the liability of the limited partners. This is a critical protection for the limited partners, who do not have to worry about being held personally liable for the partnership`s debts and obligations.

5. Dissolution: The LPA will outline the process for dissolving the partnership. This is important in the event that the partnership is no longer viable or the partners wish to exit the partnership.

In summary, a limited partnership agreement is a vital document for any partnership in New Zealand. It provides clarity and transparency about the terms and conditions of the partnership and helps to ensure that all partners are on the same page. If you are considering setting up an LP, it is critical to engage an experienced lawyer to draft an LPA that meets your specific needs.