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name: lpa-agreement language: en description: Drafts institutional-quality Limited Partnership Agreements for PE/VC fund formation. Covers GP/LP terms, capital commitments, distribution waterfall, carried interest, LPAC governance, clawback, and tax provisions. Use when drafting LPA, fund formation agreement, limited partnership terms, or PE/VC fund documents.

Limited Partnership Agreement (LPA)

Drafts a formal "Amended and Restated Agreement of Limited Partnership" governing the GP/LP relationship across a fund's full lifecycle.

Prerequisites

Gather before drafting — prompt the user for any missing items:

• Fund name, jurisdiction, target size, investment strategy
• Management fee rate/basis, carry %, preferred return %, waterfall type (deal-by-deal vs. whole-fund)
• Key persons triggering key person provisions
• Term sheet or PPM (if available)
• Side letter commitments, co-investment arrangements
• Governing law (state RULPA)

Quick Start

Draft with table of contents and consistent defined-term capitalization. Follow this article structure:

Art.	Subject	Key Contents
I	Formation & Purpose	Statutory authority, registered agent, purpose clause, investment thesis limitations
II	Definitions	Capitalized terms, alphabetical
III	Term	Initial term from final closing, investment period (~5 yrs), extension mechanism (2 x 1-yr, LPAC/LP approval)
IV	Capital Commitments	Subscription Agreements, pro rata capital calls, 10-30 day notice, default remedies
V	Allocations & Distributions	IRC 704(b) allocations, four-tier waterfall, tax distributions
VI	Management & Governance	GP authority, key person provisions, management fee, fee offsets, LPAC
VII	GP Obligations & LP Protections	Clawback, LP liability cap, fiduciary standards
VIII	Transfer Restrictions	Consent, permitted transfers (affiliates, estate vehicles), transferee conditions
IX	Tax Provisions	Pass-through status, K-1 delivery, 754 election, BBA audit regime, withholding
X	Dissolution & Liquidation	Triggering events, wind-up, final accounting, 90-day LP objection period
XI	General Provisions	Amendments, notices, confidentiality, governing law, severability

Core Economic Terms

Distribution Waterfall

Tier 1 — Return of Capital: 100% to LPs until distributions = contributed capital
Tier 2 — Preferred Return: 100% to LPs until [8]% IRR (specify compounding)
Tier 3 — GP Catch-Up: 100% to GP until GP has [carry %] of Tiers 2+3
Tier 4 — Carried Interest Split: [80]% LPs / [20]% GP

• Specify deal-by-deal (add interim clawback + escrow) or whole-fund
• Address distribution timing (mandatory vs. discretionary) and reserve authority

Management Fee

Investment Period: [2]% x commitments, quarterly in advance
Post-Investment: [2]% x [cost basis / FMV] of remaining investments
Adjustments: prorate for final closing; suspend during key person event
Fee Offset: [50-100]% of transaction/monitoring/directors' fees

Default Remedies

Include: default interest, pro rata commitment reduction, capital forfeiture, forced sale at discount to FMV, cure period with notice requirements.

Clawback

• GP returns excess carry so LPs receive capital + preferred return first
• Calculate on after-tax basis (gross-up for taxes on returned carry)
• Secure with escrow holdback (institutional) or personal guaranty with net worth covenant (emerging managers)

LPAC Checklist

• Composition: [3-7] reps elected by majority of commitments
• Term, removal, replacement procedures
• Meeting frequency (minimum quarterly)
• Advisory-only except where consent required
• Consent matters: GP co-investments, affiliate/related-party transactions, material amendments, valuation changes, auditor removal, term extensions

Tax and Regulatory

Item	Detail
Classification	Partnership pass-through
K-1 delivery	March 15 (calendar-year)
754 election	GP discretion
BBA audit	Designate partnership rep; push-out election rights
Investor quals	Accredited (Reg D) and/or qualified purchaser (ICA 3(c)(7))
AML/KYC	BSA/CIP compliance, beneficial ownership verification
Withholding	GP authorized; charge to partner's account

Pitfalls and Checks

1. Cite specific RULPA — e.g., Delaware RULPA, 6 Del. C. 17-101 et seq. [VERIFY for chosen jurisdiction]
2. Cross-references — verify all internal section references before finalizing
3. ILPA compliance — flag deviations from ILPA Principles v3.0 as non-standard
4. Side letters — note where MFN provisions override base LPA terms
5. ERISA — if benefit plan investors possible, include compliance provisions and 25% threshold analysis
6. Securities law — include unregistered securities legends referencing Securities Act 4(a)(2) and Reg D
7. Ask, don't assume — prompt user for unspecified investment period, preferred return, carry %, or waterfall structure
8. No tax advice — include disclaimer that LPs should consult their own tax advisors