limited partnership

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Related to limited partnership: Master limited partnership

Limited partnership

A partnership that includes one or more partners who have limited liability.

Limited Partnership

A business model in which at least one general partner and at least one limited partner share a business' ownership. In a limited partnership, the general partner does not usually make invest any capital, but has management authority and unlimited liability. That is, the general partner runs the business and, in the event of bankruptcy, is responsible for all debts not paid or discharged. The limited partners have no management authority and confine their participation to their capital investment. That is, limited partners invest a certain amount of money and have nothing else to do with the business. However, their liability is limited to the amount of the investment. In the worst case scenario for a limited partner, he/she loses what he/she invested. Profits are divided between general and limited partners according to an arrangement formed at the creation of the partnership.

limited partnership

A partnership in which some of the partners have a limited liability to the firm's creditors. Compare general partnership. See also master limited partnership.
What type of investor should participate in a limited partnership?

The target market for investors who could participate in most limited partnerships is composed of high net worth clients who have tax problems and significant income. An investor who participates in such a partnership should understand that most limited partnerships are illiquid investments having no public market. In addition, the investor must ask himself or herself whether use can be made of the anticipated benefits and whether the high economic risk can be sustained.

George Riles, First Vice President and Resident Manager, Merrill Lynch, Albany, GA

Limited partnership.

A limited partnership is a financial affiliation that includes at least one general partner and a number of limited partners. The partnership invests in a venture, such as real estate development or oil exploration, for financial gain.

The arrangement can be public, which means you can buy into the partnership through a brokerage firm, or private.

What makes it a limited partnership is that everyone but the general partners has limited liability. The most the limited partners can lose is the amount they invest.

limited partnership

A partnership agreement in which one person acts as the general partner, with unlimited liability for all partnership debts,and all other investors have a status similar to stockholders. Such people, called limited partners, may lose their investment if there is a loss to the project,but no creditor may reach their personal assets.The vehicle was much more popular before tax law changes took away most of the tax advantages of real property syndications.

References in periodicals archive ?
These new laws are a sign of the UK governments commitment to transparency around Scottish limited partnerships.
A) Such interest is designated a limited partnership interest in the limited partnership agreement or the certificate of limited partnership, without regard to whether the liability of the holder of such interest for obligations of the partnership is limited under the applicable State law; or
Of course, the directors can be made up of the same people (or some of them) who are limited partners, thereby placing some control over the limited partnership business back into the hands of the limited partners; but, as you can see, things begin to get complicated, especially where issues of limited liability arise.
It stated that the LLC and the limited partnership would be formed in a state other than that of the S's incorporation, so presumably this has some nontax benefit.
However, the court agreed with the taxpayer that this regulation was obsolete "when applied to LLCs and their members," and further stated, "[t]he limited partnership test is not applicable to all LLC members, because LLCs are designed to permit active involvement by LLC members in the management of the business.
1363(d), each of the limited partnerships should be viewed as an aggregation of its partners; consequently, C, as a limited partner in each of the partnerships, is deemed to own a pro rata share of each partnership's inventory of automobiles and light trucks.
Accordingly, taxpayers must make sure that the facts surrounding their use of the limited partnership structure do not warrant IRS challenge.
A family limited partnership (FLP) is a mechanism used to achieve significant gift and estate tax savings through the transfer of assets to family members, by taking advantage of rules permitting reduced valuation of the amount transferred.
How would an entity that invests in a qualified affordable housing project through a limited partnership account for its investment?

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