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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
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.
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.