An Articles of Limited Partnership is the contract that forms a limited partnership — a partnership with at least one general partner, who manages and is fully liable, and at least one limited partner, whose liability is capped at the amount of their contribution. In the Philippines it is governed by the Civil Code provisions on limited partnership (Articles 1843 to 1867), in addition to the general partnership rules where compatible.
What Is a Limited Partnership Agreement?
It is the founding document of a limited partnership. Like an ordinary Articles of Partnership, it records the firm name, business, contributions, profit shares, and management — but it also designates which partners are general and which are limited, and it must contain the statutory recitals required of a limited partnership under Article 1844.
The whole point of the structure is to attract capital from investors who want to share in the profits without exposing their personal assets beyond what they put in, and without taking on the burden of management. That trade-off — limited liability in exchange for no control — is the defining feature of the limited partner's position.
When Do You Need One?
A limited partnership is the right vehicle whenever some participants will manage and others will only invest. Common situations include:
- Bringing in passive investors — who contribute capital and share in profits but do not want to manage or to risk more than their contribution.
- Family or founder control — where the founders remain general partners with full control while relatives or backers come in as limited partners.
- Capital-raising ventures — real estate, trading, or project companies that need outside money without converting into a corporation.
- Professional or operating partners plus financiers — the working partners manage as general partners; the financiers are limited partners.
If every partner will participate in management and share liability, a general partnership agreement is the simpler choice.
Key Provisions of an Articles of Limited Partnership
A complete Articles of Limited Partnership should address all of the following:
- Firm name — which must include the word "Limited" (Art. 1846).
- Nature and purpose, principal office, and term.
- Capital contributions — cash or property only for limited partners (services are not allowed — Art. 1845).
- Profit and loss sharing — and the cap on each limited partner's liability at their contribution (Arts. 1843, 1848).
- Management — vested exclusively in the general partner(s); limited partners take no part in control (Art. 1848).
- Matters relating to limited partners — the Article 1844 recitals (contribution, profit share, return of contribution, additional contributions, substitution).
- Withdrawal and dissolution — and the effect of a general partner's or limited partner's departure.
- Governing law and SEC registration — and the acknowledgment before a notary public.
Free Sample — Limited Partnership Agreement
Below is a complete sample of an Articles of Limited Partnership for a two-partner firm — one general partner (who manages and contributes cash) and one limited partner (who contributes cash). Use Legalia Ultra to generate a notary-ready version with your own details, and to toggle optional articles such as bank accounts, salaries and drawings, admission of new partners, dispute resolution, and the notarial block.
ABC Trading Company, Limited
KNOW ALL MEN BY THESE PRESENTS:These Articles of Limited Partnership are made and entered into this January 15, 2026, at Makati City, Philippines, by and among:
Juan Dela Cruz, Filipino, of legal age, married, with address at 45 Mabini Street, Barangay Poblacion, Makati City, as a General Partner; and Maria Santos, Filipino, of legal age, single, with address at 78 Rizal Street, Barangay San Antonio, Quezon City, as a Limited Partner;
(hereinafter collectively referred to as the "Partners", the General Partner(s) and Limited Partner(s) being designated as set forth above).
NOW, THEREFORE, for and in consideration of the foregoing premises and the mutual covenants set forth herein, the Partners hereby agree to form a limited partnership under the following terms and conditions:
1. NAME
The partnership shall be conducted under the firm name "ABC Trading Company, Limited", which includes the word "Limited" as required by Article 1846 of the Civil Code of the Philippines.
2. NATURE AND PURPOSE OF BUSINESS
The purpose for which the partnership is formed is to engage in the following business: the buying and selling of construction materials and hardware supplies at wholesale and retail, and to do all things necessary, incidental, or related thereto as may be permitted by law.
3. PRINCIPAL PLACE OF BUSINESS
The principal place of business of the partnership shall be at 123 Ayala Avenue, Barangay Bel-Air, Makati City, and it may establish such other offices or places of business as the partners may from time to time agree upon.
4. TERM
The partnership shall commence upon the execution of these Articles and shall continue for a term of 10 year(s) therefrom, unless sooner dissolved in accordance with this Agreement or by operation of law.
5. CAPITAL CONTRIBUTIONS
The capital of the partnership shall consist of the contributions of the partners, which they have contributed or bound themselves to contribute, as follows:
(a) Juan Dela Cruz, General Partner, shall contribute the sum of Seven Hundred Thousand Pesos (₱700,000.00) in cash;
(b) Maria Santos, Limited Partner, shall contribute the sum of Three Hundred Thousand Pesos (₱300,000.00) in cash;
The total capital contribution of the partnership is One Million Pesos (₱1,000,000.00).
6. PROFIT AND LOSS SHARING
The net profits and net losses of the partnership shall be divided among and borne by the partners in the following proportions:
(a) Juan Dela Cruz — 60%;
(b) Maria Santos — 40%;
The liability of each Limited Partner for the debts and obligations of the partnership shall in no case exceed the amount of his or her capital contribution, in accordance with Articles 1843 and 1848 of the Civil Code.
7. MANAGEMENT
The management and control of the partnership business shall be vested exclusively in the General Partner(s), with Juan Dela Cruz acting as managing General Partner. A Limited Partner shall take no part in the control or management of the partnership business and shall have no power to bind the partnership; a Limited Partner who takes part in the control of the business may become liable as a general partner, in accordance with Article 1848 of the Civil Code.
8. MATTERS RELATING TO LIMITED PARTNERS
In accordance with Article 1844 of the Civil Code, the following are set forth with respect to the Limited Partner(s): (a) the amount and character of the contribution of each Limited Partner is as stated in the article on Capital Contributions above, contributed in cash or property and not in services; (b) each Limited Partner shall be entitled to the share of the profits stated in the article on Profit and Loss Sharing; (c) each Limited Partner shall have the right to the return of his or her contribution upon the dissolution of the partnership, or as otherwise permitted by law, to the extent that the assets of the partnership exceed its liabilities to creditors; (d) no Limited Partner shall be required to make any additional contribution beyond that stated herein, except as the partners may agree in writing; and (e) the substitution of an assignee as a Limited Partner, the admission of additional Limited Partners, and any priority among Limited Partners shall be governed by the Civil Code and the written agreement of the partners.
9. RIGHTS, POWERS, AND DUTIES OF THE PARTNERS
Each General Partner shall act as an agent of the partnership for the purpose of its business and shall observe the diligence of a good father of a family and the utmost good faith in all partnership affairs. No Limited Partner shall be deemed an agent of the partnership solely by reason of being a Limited Partner, nor shall any Limited Partner have authority to bind the partnership or take part in the control or management of the partnership business. A capitalist partner shall not, without the consent of the other partners, engage for his or her own account in any operation of the same kind of business in which the partnership is engaged, in accordance with Article 1808 of the Civil Code. An industrial partner shall not engage in business for himself or herself unless the partnership expressly permits him or her to do so; otherwise, the capitalist partners may exclude him or her from the firm or avail themselves of the benefits which he or she may have obtained, with a right to damages in either case, in accordance with Article 1789 of the Civil Code.
10. BOOKS OF ACCOUNT AND FISCAL YEAR
The partnership shall keep true and complete books of account at its principal place of business, which shall at all reasonable times be open to the inspection of every partner. The fiscal year of the partnership shall end on the thirty-first (31st) day of December of each year, unless otherwise agreed by the partners.
11. ADMISSION OF NEW PARTNERS
No person shall be admitted as a partner without the unanimous written consent of all the existing partners. Any new partner so admitted shall be bound by the terms of these Articles, as the same may be amended, and shall be liable for the obligations of the partnership only as provided by law.
12. WITHDRAWAL, RETIREMENT, OR DEATH OF A PARTNER
The retirement, death, incapacity, civil interdiction, insolvency, or withdrawal of a Limited Partner shall not, by itself, dissolve the partnership, and the rights of such Limited Partner or his or her estate shall be determined in accordance with these Articles, the books of the partnership, and applicable law. The retirement, death, incapacity, civil interdiction, insolvency, or withdrawal of a General Partner shall dissolve the partnership, unless its business is continued by the remaining General Partner(s) under a right to do so stated in these Articles or with the consent of all the remaining partners, and provided that at least one General Partner remains; in such event the remaining partners may admit or appoint a replacement General Partner in accordance with these Articles and applicable law, all in accordance with Articles 1860 and 1861 of the Civil Code.
13. DISSOLUTION AND WINDING UP
The partnership shall be dissolved and its affairs wound up upon the expiration of its term, by the unanimous agreement of the partners, or upon the occurrence of any cause provided under Articles 1828 and the following articles of the Civil Code. Upon dissolution, the assets of the partnership shall be applied in the following order: (a) to pay the debts and liabilities of the partnership owing to creditors other than partners; (b) to pay the partners for advances made and for their respective shares of the profits; (c) to return the capital contributions of the partners; and (d) to distribute any remainder among the partners in the proportions in which profits are shared.
14. DISPUTE RESOLUTION
Any dispute or controversy arising out of or in connection with this Agreement shall first be settled amicably by the partners through good-faith negotiation. Failing such settlement, the dispute shall be resolved by arbitration in accordance with the Alternative Dispute Resolution Act of 2004 (Republic Act No. 9285), and the award rendered therein shall be final and binding upon the partners.
15. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws of the Republic of the Philippines, particularly the provisions of the Civil Code of the Philippines on partnership (Articles 1767 to 1842, and Articles 1843 to 1867 on limited partnership).
16. REGISTRATION WITH THE SECURITIES AND EXCHANGE COMMISSION
The Partners shall cause these Articles of Limited Partnership to be signed, sworn to, notarized, and recorded with the Securities and Exchange Commission in accordance with the Civil Code of the Philippines and applicable Commission requirements. The Partners acknowledge that a limited partnership is formed and recognized as such only upon substantial compliance in good faith with the requirements for the execution and recording of the certificate or articles of limited partnership, in accordance with Article 1844 of the Civil Code.
17. MISCELLANEOUS
This Agreement constitutes the entire agreement among the partners with respect to the partnership and supersedes all prior agreements and understandings, whether oral or written. Any amendment hereto shall be valid only if made in writing and signed by all the partners. Should any provision of this Agreement be declared invalid or unenforceable, the remaining provisions shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have hereunto set their hands this January 15, 2026 at Makati City, Philippines.
BEFORE ME, a Notary Public for and in the above jurisdiction, personally appeared:
| Name | Competent Evidence of Identity |
|---|---|
| JUAN DELA CRUZ | Philippine Passport No. P1234567A |
| MARIA SANTOS | Philippine Passport No. P2345678B |
known to me and to me known to be the same persons who executed the foregoing instrument and acknowledged to me that the same is their free and voluntary act and deed, and the free and voluntary act and deed of the partnership herein constituted.
WITNESS MY HAND AND SEAL on the date and at the place first above written.
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Subscribe to Ultra — Generate NowHow to Draft a Limited Partnership Agreement
- Designate the general and limited partners. There must be at least one of each. The general partner(s) manage and bear full liability; the limited partner(s) invest and are liable only up to their contribution.
- Choose a compliant firm name. Include the word "Limited" (Art. 1846), and avoid using a limited partner's surname in the name — doing so can expose that partner to general liability.
- State each contribution — cash or property only for limited partners. A limited partner may not contribute services (Art. 1845). Give a peso amount for cash or a described value for property.
- Set profit shares and the liability cap. Fix each partner's share, and state that a limited partner's liability is capped at their contribution (Arts. 1843, 1848).
- Add the Article 1844 recitals. Include the statutory matters relating to limited partners — contribution, profit share, return of contribution, additional contributions, and substitution.
- Notarize and record with the SEC. Sign and swear to the articles before a notary public, and record them with the Securities and Exchange Commission — a limited partnership is recognized only upon substantial compliance in good faith (Art. 1844).
General Partner vs. Limited Partner
The whole structure turns on the difference between the two classes of partner:
- Liability. A general partner is liable for partnership debts with their separate property, after partnership assets are exhausted. A limited partner's liability is capped at their contribution (Arts. 1843, 1848) — they cannot lose more than what they put in.
- Control. Management is vested exclusively in the general partner(s). A limited partner takes no part in control; one who does may be held liable as a general partner (Art. 1848).
- Contribution. A general partner may contribute cash, property, or industry. A limited partner may contribute only cash or property — not services (Art. 1845).
- Name. The firm name must include "Limited," and a limited partner's surname generally must not appear in it (Art. 1846).
If no investor needs limited liability and everyone will share management, a general partnership agreement is simpler. For the rules common to both, see that guide.