Limited Partner Liability

[siliconflow]

In a limited partnership, I understand that as a general rule a limited partner is only liable up to the amount of his capital contribution (barring improper conduct, or overstepping certain limitations on his ability to "manage" the entity). However, my question is: If, for example, a limited partner invests 100k in capital in the partnership, and during the course of its existence, that limited partner receives a distribution of 10k (thereby making his net capital contribution 90k), and then the partnership has to be dissolved to pay off creditors, does the limited partner have to effectively bring the balance of his capital contribution to zero by repaying that 10k to satisfy creditors, or is he only liable up to the 90k that is currently still in the company?

I hope this makes sense, just trying to wrap my head around it conceptually.

Thanks!

[ds721]

liable up to the 90k because the 10k would be noted as director renumeration - a direct cost to the company. the purpose of a LLP is to reduce liability to that which is invested. if you get 10k back - that 10k is not invested, hence why you will pay capital gains tax on it.