Limited Partnership

A Limited Partnership is very similar to the general partnership with the exception that certain members of the partnership have limited liability. A Limited Partnership(“LP”) has two classes of partners: the General Partners and the Limited Partners. The General Partners are generally liable for all of the debts and liabilities of the LP. The Limited Partners are only liable to the extent of their contributions into the LP. One caveat to note is that a Limited Partner may not be involved in the day-to-day management and affairs of the LP. This has been a popular estate planning tool for many years, enabling families to pass down wealth more quickly while simultaneously providing asset protection. The LP has a single level of taxation.