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 ?
New filing requirements for all Limited Partnerships will make them more transparent with their information, preventing their abuse while enabling investors to continue to use them legitimately and invest in the UK.
The regulations clarify that an interest in an entity such as an LLC or LLP can be a "limited partnership interest" for purposes of Sec.
(2) Although the family limited partnership is an innovative use of existing laws regarding limited partnerships, it should always be established for legitimate business and non-tax estate planning purposes.
The court additionally found interests in tenancies in common that were held by the taxpayers were not interests in limited partnerships and, therefore, they also were not subject to the Sec.
* Public Limited Partnerships--a limited partnership that is registered with the SEC and which is offered to the general public through broker/dealers.
Under [section] 620.1801, except as otherwise provided for, judicial dissolution in [section] 620.1802, a limited partnership is dissolved, and its activities must be wound up, upon (a) the happening of an event specified in the partnership agreement; (b) the consent of all partners; (c) after the dissociation of a person as a general partner and certain other events do or do not occur; (d) the passage of 90 days after the dissociation of the last limited partner, unless before then the partnership admits at least one limited partner; or (e) the signing and filing of a declaration of dissolution by the Department of State under [section] 620.1809(3).
In most instances the general partner retains between a 0.0 1% and 1% ownership interest in the limited partnership and sells the ownership balance to the limited partners.
At the same time, however, only the general partner is legally allowed to conduct the business of the limited partnership or contribute services to it.
The limited partnership agreement had certain clauses, which differed from "boilerplate" agreements.
The emergence of the limited partnership as the dominant form of intermediary is a result of the extreme information asymmetries and potential incentive problems that arise in the private equity market.
While a limited partnership isn't subject to the qualification restrictions of an S corporation, it must have at least one general partner who is personally liable for its debts.
One answer to these questions is the Family Limited Partnership (FLP).

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