Limited partnership

Definition

A limited partnership is a business structure where at least one partner has unlimited liability (general partner), while the other partners (limited partners) have liability limited to the amount of their investment. Limited partners typically do not participate in the day-to-day management of the business.

Related terms

General Partnership:

A business arrangement where all partners share equal responsibility for managing the business and are equally liable for debts and obligations.

Liability:

Refers to the legal responsibility to pay debts and face consequences for actions, which can vary among different forms of business ownership.

Partnership Agreement:

A legal document that outlines how a partnership will be managed, including how profits and losses are shared among partners