What are typical splits for contribution and ownership in limited partnerships?

[Christopher J.]

Say a limited partnership is formed to purchase a rental property. I understand it's typical for the general partners to contribute less money compared to their interest in the partnership since the general partner will manage it and take on the liability. Example:

Limited partners contribute 95% of capital and get 80% interest.
General partner contributes 5% of capital and gets 20% interest.

I just made up the percentages but they seem reasonable. Are they? Is there a typical split in the industry?

Thanks!

[Justin B.]

I will try and expand on what Duncan said. In a partnership, the general partner is fully exposed so I'd recommend (like Duncan said) never being a GP yourself. Always use an entity.

I think (and Duncan will correct me if I am wrong) if you are the person who will maintain it, if you want a 20% interest for example, be a limited partner for 19% and have an entity that you control be the GP for 1%. That way you get your 20% and don't have to be personally exposed. You should consult a lawyer and CPA either way, because doing it that way vs 20% to the entire entity you control has both different tax and protection situations.