Limited Partner

Within a Limited Partnership, a part owner whose liability is limited to the amount invested and whose role in business management is restricted.

Limited Partnership interests are considered inherently passive. Certain limited partnerships may be taxed as Corporations if they exist simply to generate Passive Income to offset passive losses.

Member of a partnership whose liability for partnership obligations is limited to the investment in the partnership. A limited partner is not allowed to take active part in the management of the partnership. Limited partnerships have always been useful for tax shelters. However, limited partnerships are ruled passive investments and their tax benefits are severely limited. General Partners have unlimited joint and several liability, and manage the partnership.