One or more partners contribute to the business; they do not participate in management of the business. The limited partner or partners are silent partners and are liable only to the investment they have made. Their position is similar to that of the shareholder in a large publicly traded corporation. They have no day –to-day responsibilities of running the partnership. They receive income, capital gains, and tax benefits. |
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The general partner collects fees and a percentage of the capital gains and income. To form a limited partnership a Certificate of Limited Partnership is filed with the office of the secretary of state. The limited partnership retains the tax benefits but at least one person remains exposed completely for the partnership debts and judgments. They could lose their personal assets if the business assets were not sufficient to satisfy creditors or legal judgments.
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