What are the pros and cons of forming a limited partnership?
Limited partnerships offer each of the limited partners (in other words, not the general partner) limited liability, as long as that limited partner doesn’t actively participate in the management of the company. This means that if a limited partner, for instance, only owned one or two percent of the company, and there was a judgement against it, they would only be liable to the actual amount that they had invested, and not for more. Additionally, it’s a separate legal entity, unlike a regular general partnership, so that it can open up a bank account in its own name; it can conduct business and own property, and things like that, in its own name, and not in any one individual name. Some of the disadvantages, however, of a limited partnership are that the general partner still has unlimited liability; so unless the general partner is formed as its own separate company, that individual (if it is an individual) would be subject to all the debts and personally liable, even, for some of the
