The Limited Partnership Agreement for a New Hampshire LP

The Certificate of Limited Partnership creates the LP in the state's eyes, but it says almost nothing about how the partnership works. It lists the name, the registered agent, and the general partner — and that is roughly it. Everything about how the partners actually relate to one another lives in a separate, private document: the limited partnership agreement.

Why it is the real governing document

The agreement is a contract among the partners. It defines who put in what, who gets what share of the profits, who has authority to make which decisions, and what happens when someone wants in or out. New Hampshire's limited partnership statute, RSA 304-B, supplies default rules for situations the partners have not addressed — but those defaults are generic, and they may allocate rights and money in ways the partners never intended. A written agreement replaces the defaults with terms the partners actually chose. Skipping the agreement does not mean there are no rules; it means the state's one-size-fits-all rules govern by default.

It stays private

New Hampshire does not collect or publish the limited partnership agreement. It is not filed with the certificate, it is not in the public record, and limited partners' identities and stakes stay confidential within it. That privacy is one of the structural advantages of the LP, and it is a reason to be thorough in the agreement — it is the one place the full economic deal is written down.

The agreement should document exactly what each partner is contributing to the partnership, because contributions determine the economics and can become contentious if left vague.

What to spell out

• Initial contributions: how much cash, and what property or services, each partner is putting in at the start, and the agreed value of any non-cash contributions
• Contribution accounts: how each partner's capital account is tracked over time
• Additional contributions: whether partners can be required to contribute more later — a "capital call" — and what happens to a partner who cannot or will not meet a call
• No obligation to restore deficits, or the terms if there is one

For a limited partnership, the contribution terms carry extra weight because a limited partner's capital contribution is generally the ceiling of that partner's financial exposure. Nailing down what each limited partner committed — and whether they can be called for more — defines the boundary of the very liability protection they signed up for.

How money moves through the partnership is the heart of the agreement, and it is where general and limited partner interests are balanced.

Allocation versus distribution

• Allocation of profits and losses: how the partnership's gains and losses are assigned to partners on the books for tax purposes. This does not have to match capital percentages, and in many LPs it does not — a general partner may take a larger share of profits as compensation for managing, for example.
• Distributions: when actual cash is paid out to partners, and in what priority. A common structure returns limited partners' capital first, then splits remaining cash according to agreed percentages, sometimes with a preferred return to limited partners before the general partner shares in the upside.

Because an LP is a pass-through entity, partners owe tax on their allocated share of income whether or not cash was distributed. A well-drafted agreement often addresses this directly — for instance, providing tax distributions so partners are not left owing tax on phantom income. This is exactly the kind of provision the statutory defaults will not supply for you.

The defining feature of an LP is the split between an active, liable general partner and passive, protected limited partners. The agreement is where that split is made concrete.

General partner authority and duties

• The scope of the general partner's authority to bind the partnership, sign contracts, borrow, and manage day to day
• The general partner's duties to the partnership and the limited partners, and any standard of care or conduct the partners agree to
• Compensation or a management fee for the general partner, if any
• What major decisions — selling substantially all assets, admitting new partners, amending the agreement — require limited-partner consent despite the general partner's management authority

The limited partner control line

This is the most important protective provision in the whole agreement. A limited partner's liability shield depends on staying out of management, so the agreement should clearly enumerate what limited partners may do — vote on defined major matters, receive information, approve amendments — without crossing into control. Drawing that line carefully protects the limited partners' liability shield and prevents disputes about who was allowed to decide what.

A partnership changes over time. The agreement should anticipate partners joining, leaving, and the eventual end of the LP, so those transitions do not become crises.

Changes in the partnership

• Admitting new partners: the process and consent required to bring in a new general or limited partner
• Transfer of interests: whether a partner can sell or assign their interest, and any rights of first refusal or approval requirements — limited-partner interests are often restricted to keep the partnership closely held
• Withdrawal: what happens when a partner leaves, how their interest is valued and paid out, and — critically for an LP — what happens if the general partner withdraws, since the LP needs at least one general partner to continue
• Buy-sell provisions: how to handle death, disability, or a dispute among partners

Winding down

• The events that trigger dissolution of the partnership
• The order of winding up: paying creditors first, then returning capital, then distributing what remains per the agreed shares

Addressing these before they happen is far easier than negotiating them in the middle of a departure or a dispute. The agreement is the tool that turns a potential fight into a defined procedure.

The limited partnership agreement is the one document worth investing real care in, because it governs the money and the roles for the entire life of the LP. A thin or missing agreement is how partnerships end up litigating questions the partners could have answered on day one.

Practical guidance

• Put it in writing before you operate: have the agreement signed before the partnership takes on business, capital, or partners.
• Match it to the certificate: the general partner named in the agreement should be the general partner on the certificate, and the entity name should match.
• Use an attorney for anything non-trivial: the allocation, control, and buy-sell provisions have real legal and tax consequences, and an experienced attorney tailors them to your deal.
• Keep it with your records: store the signed agreement alongside the certificate and the EIN confirmation; banks and partners will ask for it.

We handle the state-facing formation — the Certificate of Limited Partnership and registered agent service — but we do not draft the limited partnership agreement, because it is a legal document specific to your arrangement. For the agreement itself, work with an attorney who can build in the terms that fit how your partners actually intend to run and split the partnership.