Limited Partnership: Business Entity
What is it?
A limited partnership is a type of business entity. It offers, among other things, the flexibility of a general partnership with the added feature of limited liability for certain partners. A limited partnership must consist of two or more owners, at least one of whom must be a general partner and the other a limited partner. There is no maximum limit, however, on the number of either type of partner. State law and the partnership agreement will govern the limited partnership. Your partnership agreement should contain, among other things, each partner's distributive share of partnership profits and losses. Indeed, this agreement can contain anything that is deemed appropriate by the partners and, of course, not prohibited by law. In cases where the partnership agreement fails to address an issue, your state's version of the Uniform Limited Partnership Act (ULPA) or the Revised Uniform Limited Partnership Act (RULPA) will fill in the gaps.
When can it be used?
There will be at least two partners
A limited partnership must have two or more partners: at least one general and one limited partner, both of whom will carry on a business-for-profit as co-owners.