Limited Partnership

A Limited Partnership (LP) is a business structure consisting of at least one general partner and one limited partner. The general partner manages the business and is personally liable for its debts, while the limited partner contributes Capital and Shares in the profits but has limited Liability, meaning they are only liable up to the amount of their investment.

Examples of Limited Partnerships include:

  • Capital/">Venture Capital Firms: Often structured as LPs, where general partners manage investments and limited partners are investors who provide Capital.
  • Real Estate Partnerships: Investors may become limited partners to finance property purchases while a general partner manages the properties.

Notable cases involving Limited Partnerships:

  • United States v. C.B. (1973): The court clarified the Liability of general partners in LPs regarding tax obligations.
  • In re J. Paul Getty Trust (1998): Issues surrounding the distribution of profits among limited partners were examined, highlighting the importance of clear partnership agreements.