Limited Partnership - LP

Loading the player...

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).

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. Distribution Reinvestment

    A process whereby the distribution from a limited partnership, ...
  3. DUNS Number

    A nine-digit numbering system which uniquely identifies an individual ...
  4. Joint Liability

    An obligation, including an obligation to repay a debt between ...
  5. Master Limited Partnership - MLP

    A type of limited partnership that is publicly traded. There ...
  6. Partnership

    A business organization in which two or more individuals manage ...
Related Articles
  1. Markets

    Top Investment Banks in the Sports Industry

    Find out why the top investment banks in the sports industry tend to be smaller niche players and are prepared to battle the Wall Street giants for business.
  2. Entrepreneurship

    Taxes in California for Small Business: The Basics

    Understand the tax implications of running a small business in California, and learn which state taxes apply based on business type.
  3. 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.
  4. Retirement

    Discover Master Limited Partnerships

    These unique investments provide significant tax advantages.
  5. 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.
  6. 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.
  7. Options & Futures

    An Introduction To Swaps

    Learn how these derivatives work and how companies can benefit from them.
  8. Entrepreneurship

    LLC Vs. Incorporation (Inc.): Which Should I Choose?

    Learn about the advantages of forming an LLC over a corporation, including ease of administration. Read about the advantages that a corporation may offer.
  9. Stock Analysis

    7 Trump Businesses You Didn't Know Existed

    Understand what Donald Trump is best known for and the types of income streams he's created. Learn about seven obscure businesses he owns.
  10. Investing Basics

    What's an Electronic Communications Network?

    An electronic communications network connects buyers and sellers so they can directly trade stocks, currencies and other financial instruments.
RELATED FAQS
  1. Do mutual fund companies pay taxes?

    Mutual funds do not pay taxes on income if they meet certain regulatory requirements. Mutual funds are incorporated as regulated ... Read Full Answer >>
  2. 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 >>
  3. 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 >>
  4. 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 >>
  5. 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 >>
  6. 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 >>
Hot Definitions
  1. Black Swan

    An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult ...
  2. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  3. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
  4. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
  5. Super Bowl Indicator

    An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in ...
Trading Center