Although similar to a “General Partnership,” (TWO or more members, agreement amongst the partners, etc…) the Limited Partnership offers its “Limited” partners asset protection and a shielding from personal liability.
TWO or more partners must exist. However, one partner may be the “General” partner and the other may be the “Limited” partner.
The General partners are exposed to personal liability to the same extent as they would be in a General Partnership. In other words, the General partners have Joint and several liability for the debts and liabilities of the entire partnership and may be personally liable for the acts of the other partners in their dealings with third parties.
The Limited partners, however, may benefit from personal asset protection to the extent that they are NOT managing the partnership and will only be liable up to the amount of their investment in the company.
The Limited Partners must register their information and the amount of their investment with the appropriate state entity. In addition, the Limited Partner must disclose this “Limited” status to any third parties transacting with the partnership.