1956 Limited Partnership Agreement
The founding document of Buffett Associates, Ltd., establishing the terms of the partnership. Buffett begins managing money for family and friends with $105,100, outlining his investment philosophy focused on finding undervalued securities.
“I have been managing money for several years, during which time I have achieved results somewhat better than the Dow Jones Industrial Average. I intend to compound money at rates far in excess of what is available through conventional investments.”
The undersigned hereby certify that they have this day formed a limited partnership under the following terms and conditions:
Article I
The name of the partnership shall be: BUFFETT ASSOCIATES, LTD.
Article II
The business of the partnership shall be: to buy, sell, and deal in stocks, bonds, and other securities, commodities, and other investments, for the account of the partnership.
Article III
The principal place of business shall be: Omaha, Douglas County, Nebraska.
Article IV
The General Partner is:
- Warren E. Buffett, Omaha, Nebraska
The Limited Partners are:
- Charles E. Peterson, Jr., Omaha, Nebraska
- Elisabeth B. Peterson, Omaha, Nebraska
- Doris B. Wood, Omaha, Nebraska
- Truman S. Wood, Omaha, Nebraska
- Daniel J. Monen, Jr., Omaha, Nebraska
- William H. Thompson, Omaha, Nebraska
- Alice R. Buffett, Omaha, Nebraska
The parties set forth above are hereinafter collectively referred to as the "Limited Partners."
Article V
The term of the partnership shall commence May 1, 1956, and shall end April 30, 1976, unless sooner terminated pursuant to the terms of this agreement or by the laws of the State of Nebraska.
Article VI
The cash contributions made by each Limited Partner are as follows:
| Limited Partner | Contribution |
|---|---|
| Charles E. Peterson, Jr. | $5,000 |
| Elisabeth B. Peterson | $25,000 |
| Doris B. Wood | $5,000 |
| Truman S. Wood | $5,000 |
| Daniel J. Monen, Jr. | $5,000 |
| William H. Thompson | $25,000 |
| Alice R. Buffett | $35,000 |
Article VII
No agreement has been made between the partners as to additional contributions.
Article VIII
No time has been agreed upon for the return of the Limited Partners' contributions, other than upon termination of the partnership or the withdrawal of a Limited Partner.
Article IX
Each Limited Partner shall receive, as a share of profits or other compensation, interest at the rate of 4% per annum on the balance in their capital account as of December 31 of each year (as shown in the Federal income tax return filed by the partnership for such year), such interest to be charged as an expense of the partnership.
For the period ending December 31, 1956 (being less than a full year), no separate interest calculation shall be made; instead, each Limited Partner's interest for this period shall be computed at 2% of their initial contribution, which shall be charged as an expense of the partnership for this period.
In addition, each Limited Partner shall share in the overall net profits of the partnership from the date of its formation to any specific date in the following proportions:
- Charles E. Peterson, Jr. — 1/42
- Elisabeth B. Peterson — 5/42
- Doris B. Wood — 1/42
- Truman S. Wood — 1/42
- Daniel J. Monen, Jr. — 1/42
- William H. Thompson — 5/42
- Alice R. Buffett — 7/42
Article X
No Limited Partner shall have the right to substitute an assignee as a contributor in their place.
Article XI
No right is given to partners to admit additional Limited Partners.
Article XII
No priority exists among the Limited Partners.
Article XIII
In the event of the death, retirement, or mental incapacity of the General Partner, the remaining partners shall have no right to continue the business of the partnership.
Article XIV
No Limited Partner shall have the right to demand or receive property other than cash in return for their contribution.
Date of Execution: May 1, 1956
Witnesses: (signed)
Charles E. Peterson, Jr. Elisabeth B. Peterson Doris B. Wood Truman S. Wood William H. Thompson Alice R. Buffett
Source: Original partnership agreement, Buffett Associates, Ltd., 1956