What is a limited partnership?
A Limited Partnership (“LP”) is an association of one or more general partners together with one or more limited partners to conduct business for profit as co-owners. The most important feature of a LP is that the limited partner enjoys limited liability as long as s/he does not participate in the control of the partnership business. The general partners of the LP are the ones who are responsible for the obligations of the LP. In a limited partnership, it is the general partner who remains liable for the debts and obligations of the entity. For larger risk exposure, a corporation may be formed to serve as the general partner. A corporate general partner is protected from direct attack by a judgment creditor because the ultimate liability for the debts and obligations rests with the shareholders. By spreading share ownership, individual exposure is considerably reduced. Even without a corporate general partner, risk can be spread by distribution of limited partnership shares. If a judgm
Limited partnerships are partnerships in which one or more of the partners contribute to the establishment and the ongoing operation of the business but do so without the full authority granted to a general partner. The limited partner generally has limited or no managerial authority when it comes to the daily operation of the business, and is only liable for the debts of the business up to the amount of their investment in the company. The limited partnership model is used extensively in many countries around the world, and is considered one of the most common types of business models. It is not unusual for people to confuse a limited partnership with a limited liability partnership. The main difference is that with a limited liability partnership, all partners have some type of limit on the extent of their liability. With a limited partnership, at least one partner is classified a general partner and thus assumes more liability than any of the limited partners. One of the advantages
