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Business Structures in Utah: Limited Partnerships

by Norris Law Group on October 16, 2014

Business Structures in Utah: Limited PartnershipsIn our previous entry, we covered Utah general partnerships, including why they are relatively easy to set up and some of the potential advantages and disadvantages of them. But that is not the only type of partnership available in Utah. In this blog, we will take a look at limited partnerships and how they differ from general partnerships, according to How to Do Business in Utah, a free online guide available from the Utah Governor’s Office of Economic Development.

Utah limited partnerships are regulated much more tightly than general partnerships. While this extra scrutiny might seem like a bit of an overreach, it does serve to allow limited partners to invest in businesses as “silent partners” who do not go on to assume unlimited liability in case of loss or bankruptcy.

At least one partner must be the main manager of the business. One or more limited partners may join, and their liability extends only as far as their personal investment. For example, if a limited partner invests $50,000 into a Utah business, and that business ultimately goes into bankruptcy, that partner is only liable for the $50,000 investment. Lienholders may not “come after” that partner’s personal home or other assets. But this benefit is offered because limited partners may not take any part in the running of the business, nor can limited partners be held accountable for the actions of the managing partner.

Utah limited partnerships must be filed with the Utah Division of Corporations and Commercial Code. An experienced attorney with knowledge of how to properly set up limited partnerships can help you do so.

Attorney Graham Norris and his associates at the Norris Law Group serve the residents of Utah County, UT and throughout Utah, Wyoming and Idaho. Contact them today at 801-932-1238 or online for a free consultation.

 

 

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