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Limited Partnership

A Limited Partnership is a business owned by two or more individuals or other business entities in which at least one of the partners has limited liability protection. There must be at least one general partner who remains personally responsible for all the partnership’s liabilities. Limited partnerships are created by filing a “Certificate of Limited Partnership” with the Secretary of State.

Advantages — A limited partner’s risk is limited to his/her financial – cash or property – investment in the business. The general partner(s) can retain personal control of the business while increasing the financial resources available to the businesses without incurring long-term debt. A limited partnership may raise capital by selling additional limited partnership interests in the business.

Disadvantages — The general partner(s) remain(s) personally responsible for all the liabilities and debts of the business. The limited partner(s) may not work in the business or participate in management without risking loss of limited liability status.

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