Limited Partnership Agreement (LPA) is the master contract that defines how a private fund runs — economics, powers, and LP protections.

How it works

The GP entity and each LP sign the LPA and related subscription documents. Core sections: term and extensions, capital call mechanics, investment period, fee and carry waterfall (often with preferred return and clawback), expense policies, key person, LPAC consent items, and default remedies if an LP fails to fund.

Side letters customize terms for large LPs but cannot usually violate the LPA’s core economics without disclosure to others via most-favored-nation provisions.

Why it matters

• LPs: The LPA is the diligence bible — read excuse rights, GP removal triggers, and distribution waterfall before committing.
• GPs: Operating outside the LPA invites LP disputes and reputational damage. Fund extensions need LPA and often LPAC paths.
• Founders: You will not sign an LPA, but GP fund life, recycling, and follow-on authority come from it.

Amendments to the LPA often require supermajority LP consent for economic changes. Standard amendments for regulatory or tax fixes may need lower thresholds — read voting sections carefully.

PPMs summarize the LPA for marketing but are not substitutes in legal disputes — the LPA controls.

Common mistake

Assuming the PPM marketing deck equals the LPA. Legal terms in the LPA control when they differ.

Practical takeaway

Founders will not read the LPA, but you can ask your GP how fund term, investment period, and recycling rules affect their ability to support you in year six or seven — those answers come straight from LPA constraints.

Related ideas

• Limited Partner (LP)
• Key Person Clause
• LP clawback and carry waterfall