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The Partnership Act, 1891 was amended in January 1998 to provide for the creation of "limited partnerships". This is a significant change to the law of partnership, which has hitherto required partners to undertake unlimited joint and several liability for the debts of the partnership.
A limited partnership must comprise at least one "general partner" and at least one "limited partner". It is formed upon its registration by the Corporate Affairs Commission. The registration process requires each limited partner to identify himself as such and to state that his liability to contribute to the partnership is to be limited to a certain sum.
A limited partner cannot take part in the management of the business and cannot bind the partnership. A limited partner cannot ordinarily dissolve the partnership by notice and his death, insolvency or retirement does not ordinarily dissolve the partnership.
Any document issued on behalf of a limited partnership in connection with its business must contain the words "A Limited Partnership" immediately adjacent to the firm name.
A limited partnership must maintain a "registered office" within South Australia.
It seems that the intention of this legislation is to facilitate investment by permitting investors in partnership businesses to enjoy "limited liability" akin to that enjoyed by shareholders in companies. However, expert accounting and taxation advice should be taken before embarking on any venture involving a limited partnership.