A limited partnership (LP) is a type of business partnership that has two types of partners — general and limited — and there are different liabilities for the two.
In order to qualify as an LP, a business has to have at least one general partner and one limited partner.
General partners in an LP are personally liable for the business. Because the general partner of a business can be a person or entity, many people choose to set up an LLC to act as the general partner, thereby avoiding personal liability. General partners are also involved the actual running of the business.
Limited partners, on the other hand, aren’t personally liable. Limited partners can’t contribute to the day-to-day operation of the busi...