In recent years, Limited Partnerships or "LPs" have become an increasingly popular choice for businesses. Especially those involved in investment ventures.
The main reason is that unlike General Partnerships, LIMITED PARTNERSHIPS (as the name suggests)
offer the "LIMITED PARTNERS" the ability to:
"LIMIT THEIR LIABILITY RISK!"
"LIMIT THEIR BUSINESS INVOLVEMENT!"
Limited Partnerships are particularly useful and attractive to investors
who like to participate in the profits of the business,
but not necessarily its risks or daily operations.
Limited Partnerships are frequently formed to acquire ownership in motion pictures. For tax purposes, a Limited Partnership typically works like a general partnership. Profits are "passed through" to the partners who report the income on their personal tax returns. Zone Partners, Limited Partnership provides its partners with a K-1 statement at the end of the year.
A Limited Partnership is a business entity comprised of two or more partners who operate or manage a business together. In every Limited Partnership (LP), there are two types of partners. There are "General Partners" and "Limited Partners".
WHAT IS A GENERAL PARTNER?
WHAT IS A LIMITED PARTNER?
Limited partners contribute capital to the partnership, but do NOT participate in the daily operations of the company. As an added benefit, they are also SHIELDED from COMPANY DEBTS and other LIABILITIES. Limited partnerships are a great choice for individuals who lack the time or expertise to run a business but would like to share in the profits.
General Partners (GP) control the company's day-to-day operations and take on the legal debts and obligations of the business. In other words, they run the show. Because the General Partners are responsible for any lawsuits and or debts incurred by the company, general partners often form corporations or LLCs to protect themselves from liability.
A limited partnership is NOT a stock!
A limited partnership is NOT affected by corrections in the stock market!
"LIMITED PARTNERS" DO NO WORK!
"LIMITED PARTNERS" HAVE NO LIABILITY!