Limited Partnership - LP

AAA

DEFINITION of 'Limited Partnership - LP'

Two or more partners united 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 that partner has invested. Limited partners do not receive dividends, but enjoy direct access to the flow of income and expenses.

This term is also referred to as a "limited liability partnership" (LLP).

VIDEO

Loading the player...

BREAKING DOWN 'Limited Partnership - LP'

The main advantage to this structure is that the owners are generally not liable for the debts of the company.

RELATED TERMS
  1. Incentive Distribution Rights - ...

    These give a limited partnership's general partner an increasing ...
  2. Club Deal

    A private equity buyout or the assumption of a controlling interest ...
  3. DUNS Number

    A nine-digit numbering system which uniquely identifies an individual ...
  4. Limited Liability Company - LLC

    A corporate structure whereby the members of the company cannot ...
  5. Partnership

    A business organization in which two or more individuals manage ...
  6. Master Limited Partnership - MLP

    A type of limited partnership that is publicly traded. There ...
Related Articles
  1. Term

    What are Limited Partnerships?

    A limited partnership involves two or more partners conducting a business, but one is only liable for his capital investment. They are also called silent partnerships or limited liability partnerships.
  2. Retirement

    Discover Master Limited Partnerships

    These unique investments provide significant tax advantages.
  3. Entrepreneurship

    Start Your Own Small Business

    Quit your job, be your own boss and earn a paycheck. Find out what to do to make it happen.
  4. Mutual Funds & ETFs

    Activist Hedge Funds: Follow The Trail To Profit

    Learn to profit by following the lead of some of Wall Street's most ruthless investors.
  5. Term

    What is Passive Income?

    Passive income is earned by someone from ventures in which they did not actively participate.
  6. Economics

    Explaining Strategic Alliances

    A strategic alliance is a business relationship between two or more entities that share recourses for a common goal.
  7. Fundamental Analysis

    An Inside Look at Pinterest's Business Model

    Learn about Pinterest and the type of company it is trying to become. Understand the company's business model and what makes it unique.
  8. Entrepreneurship

    What's the Purpose of IRS Form 1065?

    Business partners need the information on this form to complete their own tax returns. Here are the details.
  9. Entrepreneurship

    5 Bad Habits Every Entrepreneur Should Avoid

    Learn how to avoid specific bad habits that plague entrepreneurs, such as failure to plan, bad associations and not keeping a good work-life balance.
  10. Investing Basics

    What is a Collateralized Loan Obligation?

    A collateralized loan obligation (CLO) is a security consisting of a pool of loans organized by maturity and risk.
RELATED FAQS
  1. What are the tax implications of owning a master limited partnership (MLP)?

    There are significant tax benefits to owning units in a master limited partnership (MLP), although most investors do not ... Read Full Answer >>
  2. What's the difference between limited liability partnership and general partnership?

    A partnership is a business agreement between two or more people who are called partners. Each partner owns a share of the ... Read Full Answer >>
  3. I am starting a limited liability company (LLC). I will be the sole member. Can I ...

    In a word, yes. A limited liability company (LLC) is eligible to establish a simplified employee pension (SEP). Keep in ... Read Full Answer >>
  4. What are Schedule K-1 documents used for?

    The Schedule K-1 is a tax document issued for an investment in partnership interests. The purpose of the Schedule K-1 is ... Read Full Answer >>
  5. What's the difference between publicly- and privately-held companies?

    Privately-held companies are - no surprise here - privately held. This means that, in most cases, the company is owned by ... Read Full Answer >>
  6. How are joint ventures regulated in the United States?

    Joint ventures are a very specific type of business arrangement. They can be organized in several different legal structures, ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Depreciation

    1. A method of allocating the cost of a tangible asset over its useful life. Businesses depreciate long-term assets for both ...
  2. Recession

    A significant decline in activity across the economy, lasting longer than a few months. It is visible in industrial production, ...
  3. Bubble Theory

    A school of thought that believes that the prices of assets can temporarily rise far above their true values and that these ...
  4. Stock Market Crash

    A rapid and often unanticipated drop in stock prices. A stock market crash can be the result of major catastrophic events, ...
  5. Financial Crisis

    A situation in which the value of financial institutions or assets drops rapidly. A financial crisis is often associated ...
  6. Election Period

    The period of time during which an investor who owns an extendable or retractable bond must indicate to the issuer whether ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!