A General Partner / Limited Partner arrangement used in real estate syndications. The GP manages the project and assumes unlimited liability, while LPs invest capital passively with liability generally limited to their investment amount. Because LPs contribute capital passively and rely on the GP's efforts, LP units are typically securities under Canadian provincial securities law (NI 45-106) and must be distributed under a valid prospectus exemption through a registered dealer. GP/LP structures have material legal and tax consequences — retain a securities lawyer before setting one up or investing in one.
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