Limitation on the General Partner’s Responsibility Clause Samples
The "Limitation on the General Partner’s Responsibility" clause defines the extent to which the general partner can be held liable for actions taken in the course of managing a partnership. Typically, this clause specifies that the general partner is not personally responsible for losses or liabilities incurred by the partnership, except in cases of gross negligence, willful misconduct, or breach of fiduciary duty. For example, if the partnership suffers a financial loss due to ordinary business risks, the general partner would not be required to compensate the partnership or its limited partners. The core function of this clause is to protect the general partner from personal liability for routine business decisions, thereby encouraging effective management while still holding them accountable for serious misconduct.
Limitation on the General Partner’s Responsibility. The General Partner’s obligations to perform the functions enumerated herein and such other obligations as may arise by operation of law shall be performable only to the extent that the Partnership has funds available therefor, and the General Partner shall not be personally liable to furnish involuntarily its own funds for any such purpose. The General Partner shall be obligated to act in good faith, and so long as it acts in good faith and is not grossly negligent, it shall have no liability or obligation to the Limited Partner or the Partnership for any decision, act or omission, whether or not such decision, act or omission may have been reasonably prudent, may have been a negligent act or omission or may have been in good or bad business judgment.