What is a Limited Partnership Agreement or Shareholders Agreement?

A Limited Partnership Agreement or Shareholder's Agreement outlines the rights and responsibilities of partners in the investment.

Things to Look For:

  • Clear definitions of partner roles and responsibilities.
  • Terms for profit distribution and loss sharing.
  • Provisions for dispute resolution and exit strategies.

Questions to Ask:

  • What are the key terms of the partnership agreement?
  • How are profits and losses allocated among partners?
  • What are the exit options if a partner wants to leave?

Example: If the agreement has complex profit-sharing arrangements, ask for a detailed explanation to ensure you understand your potential returns.