1.1.3.2.1. Types of Partners and Capital Contributions
General partners share in the daily operations of the business. The partnership agreement will spell out their specific duties and how much power they have in making decisions. One of them will be assigned to manage the partnership, or the partnership may delegate that authority to an agent or employee. General partners often contribute as little as 1% of the initial capitalization, but their contribution may be greater than that or nothing at all. For assuming unlimited liability and taking on various duties, they receive a fee or a share in the distribution as payment.
A general partner present at the formation of a limited partnership is known as an original general partner. Among the original general partners is an entity called a special limited partner. A special limited partner is a general partner having the sole responsibility to prevent a limited partnership from dissolving when the last limited partner withdraws. Usually, it has no financial stake in the partnership and no interest in its profits and losses. When the last limited partner withdraws, the special limited partner immediately and automatically will become a limited partner, with all its ri