A Texas limited partnership is a partnership formed by two or more persons or entities. A limited partnership has two different types of partners – one or more general partners and one or more limited partners. In a limited partnership, there is at least one general partner who controls the organization and is personally liable for the entity’s debts. In contrast, the limited partners contribute capital and share profits, but cannot manage the business. In addition, if the entity follows formality requirements, the limited partners are shielded from personal liability for the entity’s debts.
The limited partnership operates in accordance with a partnership agreement that outlines the affairs of the limited partnership and the conduct of its business. Even though the partnership agreement is not filed for public record with the state, the partnership agreement should be in writing.