Do Private Limited Companies Have A Board Of Directors
Related Articles
- 1 Liability of a Corporation vs. a Partnership
- 2 Do Individuals Investing in an S Corporation Need to Be Owners?
- 3 Does a Company With 12 Shareholders Need a Board of Directors?
- 4 A Single-Owner Business vs. Stockholders' Equity
A limited partnership is a distinctly different business form than a general partnership. Limited partners have no voice in how the business is managed. The management of a limited partnership business may or may not have officers and a board of directors. The level of management structure depends on the size and purpose of the limited partnership.
A Company can have a maximum of 15(fifteen) Directors. It may appoint more than 15 directors by passing special resolution. The criteria for minimum no. Of woman director in companies is described here. Note: Earlier similar provisions were prescribed under section 252 of the companies act 1956.
Two Types of Partners
A limited partnership must have at least one general partner and one limited partner. The general partners run the business of the partnership have unlimited liability. A limited partner is not involved in business operations or management. Limited partners can be viewed as investors in the business, entitled to receive a proportionate share of the partnership profits. A limited partnership does not pay income taxes, so all income and deductible expenses pass through proportionately to the general and limited partners.
GP Structure
The general partner of a limited partnership business can be a single individual who runs the business or it may be a separate company that owns the general partnership interest in the company. If the general partner is structured as its own business, that business may be set up with company officers and a board of directors. If the general partner does have a board, it is possible for to have board members that are limited partners.
Publicly Traded LPs
Why Do Companies Have Boards
The limited partnership structure allows a company to be run like more like a corporation, with limited partner units trading on the stock exchanges. A publicly traded LP will have officers and a board of directors for the general partner. A completely separate publicly traded company that is a corporation or another limited partnership may own the general partner interests of a publicly traded limited partnership. You will know if a stock is a partnership if it has 'partners' in the name or an LP at the end of the name instead of an inc. or corp.
Small Business Limited Partnership
You can organize a small business as a limited partnership, using the partnership as a way to bring in investors without giving up any control of how your business is run. As the general partner of a closely held limited partnership, you can decide if your business needs a board of directors or other officers besides yourself. It is possible to just be the general partner yourself or you can have multiple general partners who run the business together while the limited partners just receive a portion of the profits.
References (4)
About the Author
Tim Plaehn has been writing financial, investment and trading articles and blogs since 2007. His work has appeared online at Seeking Alpha, Marketwatch.com and various other websites. Plaehn has a bachelor's degree in mathematics from the U.S. Air Force Academy.
Cite this Article