Reasons for Creating a Limited Partnership

Reasons for Creating a Limited Partnership

In recent years, the limited partnership, or LP, has become an increasingly popular choice for businesses--especially those involved in real estate or other investment ventures. The main reason is that, unlike general partnerships, limited partnerships (as the name suggests) have the ability to limit both the liability risk and the business involvement of certain partners known as "limited partners." This feature is particularly useful for attracting investment partners who'd like to participate in the profits of the business but not necessarily its risks or daily operations.