II. That the general nature of the business intended to be transacted is a general commission and brokerage business, including the dealing in stocks, bonds and other securities, as generally carried on in the City of New York.
III. That the names of all the general and special part ners interested therein (all of whom are of full age) and their respective places of residence are as follows, to wit: George. B. Post, Jr., who is a general partner, and who resides at Bernardsville, Somerset County, State of New Jersey. Arthur Turnbull, who is a general partner, and who resides in the City and County of New York.
Benson B. Sloan, who is a general partner, and who resides in the City and County of New York.
Alfred L. Dennis, who is a general partner, and who re sides in Newark, Essex County, State of New Jersey.
'Neville G. Higham, who is a general partner, and who re sides in the City and County of New York.
Henry Shaw, who is a general partner, and who resides in Morristown, Morris County, New Jersey.
Nathaniel L. McCready, who is a special partner, and who resides in the City and County of New York.
IA'. That the amount of capital which Nathaniel L. Mc Cready-, the special partner, has heretofore contributed to the common stock of said limited partnership is the sum of three hundred and fifty thousand dollars ($350,000), which he paid in cash, and that the said amount, namely, three hundred and fifty thousand dollars ($350,000) has been contributed by the said special partner to the common stock of the partnership as renewed and continued.
V. That the time for which the said limited partnership is to be renewed and continued is five (5) years from De cember 31, 1910—on which date such renewed and continued partnership is to begin—to January 1, 1916, and that the time at which, as so renewed and continued, it is to. end is December 31, 1915.
5. Rights and liabilities of members.—General part ners have all the rights and liabilities of the members of ordinary partnerships. Special partners have no voice in the business, and must contribute the capi tal they have agreed to subscribe. They are not lenders of money and therefore can verify the ac counts and inspect the management; they have a right to profits and not to fixed interest; but they cannot prove their claims as creditors upon the bank ruptcy of the concern.
6. Advantages of limited partnerships.—Fre quently a wealthy man will aid a friend or relative by becoming a special partner in a limited partner ship. Thus, increased capital is acquired without im
posing unusual liabilities on the investors if they are in no way responsible for its management. This form of organization is the first to be studied which provides a means for separating the elements of .control, in come and risk. Moreover, a limited partnership is usually free from governmental control, tho this ad vantage may at any time be lost since the organiza tion is a statutory creature, and therefore subject to the visitorial power of the state. The state has not as yet, however, seen fit to exercise that power gen erally.
7. Disadvantages of the limited From the point of view of the firm, the fact that the limited partnership is subject to the regulatory power of the state is frequently a disadvantage. Moreover it is not open to all forms of industry and enterprise. Only such businesses as the statutes enumerate may be conducted under this form of association. If, as is the case in some states, the law does not include private banking as an occupation expressly permitted to. be organized into a limited partnership a group of people wishing to go into that business in the form of a limited partnership might execute all the instru ments, go thru all the forms and follow all the rules required by the statute; however, the association would not be a limited partnership, but a general part nership and the so-called special partner would not escape unlimited personal liability.
8. Cone/usion.—In continental Europe the limited partnership is used extensively. It has the great merit, from a social standpoint, of placing responsi bility on the active managers. Since those who es cape liability are not asking for immunity from their own acts and cannot be said to have misled creditors in choosing their principals any more than the credi tors have misled the special partners by extending credit to the concern, this would seem an excellent form of business that merits more extensive adoption in America and England. However, the many causes for dissolution, and chiefly the certain dissolution thru death, prevent the limited partnership from borrow ing large SUMS ; itS USe, therefore, will generally be confined to relatively small concerns and to businesses that require close management and large personal re sponsibility.