| a partnership formed by at least one general partner and at least one special partner. |
| limited partnership n. A partnership in which some of the partners have a limited liability to the firm's creditors. |
Limited Partnership - LP
Two or more partners formed to conduct a business jointly, and in which one or more of the partners is liable only to the extent of the amount of money they have invested. Limited partners do not receive dividends, but enjoy direct access to the flow of income and expenses.
Investopedia Commentary
The main advantage is the owners are generally not liable for the debts of the company. This term is also referred to as a Limited Liability Partnership (LLP).
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See also: Master Limited Partnership (MLP), Partnership
Also spelled: LP
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 |
