Limited partner

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Limited partner

A partner who has limited legal liability for the obligations of the partnership.

Limited Partner

In a company, one who shares with at least one other partner, jointly and severally, a business' ownership. Limited partners exist in limited partnerships and limited liability partnerships, but in both situations they are only liable for the capital they have invested in case of bankruptcy. In limited partnerships, the limited partners have no management authority and confine their participation to their capital investment. In limited liability partnerships, all partners are limited and therefore at least some have management authority. Profits are divided among limited partners according to an arrangement formed at the creation of the partnership.

Limited partner.

A limited partner is a member of a partnership whose only financial risk is the amount he or she has invested.

In contrast, all the assets of the general partner or partners, including those held outside the partnership, could be vulnerable to claims brought by the partnership's creditors.

References in periodicals archive ?
The proposed regulations focus on the member's relationship to the LLC in defining who is a limited partner for purposes of Sec.
The FLP's partnership agreement should not waive the state-imposed fiduciary duties of the general partner toward the limited partners.
A typical limited partnership arrangement involves a general partner, usually a corporation, which carries on the business of the partnership, and several limited partners all of whom, generally speaking, function as little more than passive investors.
1402(a)2(h), an individual who fails the three limited partner general tests can still qualify as a limited partner, under one of two exceptions.
The limited partners sued the general partners for failing to fulfill their agreement.
If an LLC member fails the general test simply because he or she participates in the partnership's trade or business more than 500 hours during the entity's tax year, the member still may be considered a limited partner if (1) he or she has only one class of interest and (2) immediately after acquiring that interest
A limited partner materially participates in the partnership activities only if he meets the first, fifth or sixth tests.
469-5T(e)(3)(ii), an individual who is both a general and a limited partner in an entity is not treated as a limited partner.
In most cases, the limited partners derive no economic benefit from the investment other than the expected tax benefits.
The limited-partner equivalence test referenced the state of organization rather than the state of operation and was partially designed to exclude professional service LLCs from the benefits of limited partner status.
Issue: Will the conversion of Dick's general partner interest to a limited partner interest achieve his goal of limited liability?

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