When a partner is appointed, the limitation of liability does not extend to a debt or obligation of the limited partnership until the partner becomes Kommanditist (s 60 (1)). Conversely, the limitation of liability does not apply to a debt or obligation of the limited partnership, which arises after the partner becomes the partner of the complebility (s60 (2)). As a partnership, limited partnerships have been created to encourage investment in venture capital projects (i.e. projects with high growth potential). They are created as organizations that exist separately from their partners. Like limited partnerships, they must be registered to be created. But they also need a written partnership agreement at all times. A commander may, with the agreement of the partners, transfer the sponsor`s share of the limited partnership, and the new commander assumes all the rights and obligations of the former (s 67 (1)). A sponsor cannot participate in the management of the limited partnership and is not authorized to hire it (S 65 (1)). When a sponsor participates in the management of the limited partnership`s business, the sponsor is liable, as if the partner were a co-shareholder, of the debts and obligations of the company that participate in the management of that company during the sponsor (s 65 (2)).

Each of Australia`s states and territories has its own Partnership Act, the provisions of which, unless they are differentiated or denied by a partnership agreement, can leave partners in unexpected situations. Normal or general partnerships are often used in small “mom” and “dad” commercial operations because they are the easiest to create. They do not need to be registered with the South Australian government and the partners do not need to enter into a written partnership agreement to settle the relationship between them. Each partner is responsible for all the debts of the partnership from the moment it becomes a partner.