Limited Partnership

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Limited partnership

A form of ownership in which partners are divided into two classes; the general partners who actively manage the operations and bear full responsibility; and the limited partners, whose exposure is normally limited in amount of obligation and have no control over the affairs of the partnership.

Limited Partnership


in bourgeois civil law, a type of commercial or industrial company. The partners in such a company are divided into two categories: those whose liability for the company’s debts is limited to the amount they have invested, and those who are totally liable. Limited partnerships are most common in Great Britain, where the law does not give such partnerships the rights of a legal person. This type of British company is very similar to the commandite in France, the Federal Republic of Germany, and Italy.

References in periodicals archive ?
Under the proposed regulations, an individual who is a service partner in a service partnership may not be a limited partner.
To avoid the adverse tax result of Hacki, FLP agreements should require annual distributions, provide limited partners with the ability to sell their interest without the consent of the general partner and allow the partnership's liquidation only pursuant to state law.
Of course, the directors can be made up of the same people (or some of them) who are limited partners, thereby placing some control over the limited partnership business back into the hands of the limited partners; but, as you can see, things begin to get complicated, especially where issues of limited liability arise.
The individual may be treated as a limited partner with respect to a certain class of ownership if other individuals treated as limited partners under the general, rules own a substantial, continuing interest in such class of ownership and the individual's rights and obligations as to that class of ownership are identical to those held by the other limited partners.
If substantially all a partnership's activities involve performing services in the fields of health, law, engineering, architecture, accounting, actuarial science or consulting, any individual who provides services as part of that trade or business is not considered a limited partner.
The board is committed to implementing a new voting process that will be consistent with the original goal of giving each limited partner a meaningful right to vote in the election of directors.
For this reason, the taxpayer's relationship to the LLC was analogous to that of a limited partner to a limited partnership.
The proposed regulations contradicted the normal approach of permitting a person who was both a general and limited partner to bifurcate his distributive share of LLC income and exclude the limited partner interest portion from SE tax.
Restructuring Corvette City from a general partnership to a limited partnership and exchanging Dick's general partner interest for a limited partner interest could accomplish the goal of limiting Dick's risk of loss to sums he invested in Corvette City.
In the FSA, the partnership agreement provided that the entity would continue for 50 years or until the general partner and more than 50% of the limited partner interests agreed to termination.
Limited partner ownership and participation restrictions are irrelevant to LLCs, which offer more favorable tax attributes than limited partnerships and avoid the restrictions of S corporations.

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