A limited partnership is a partnership in which there are two types of partners—general and limited partners. General partners manage the business and are jointly liable for the debts and obligations of the business. Limited partners have limited liability for business debts and obligations but don’t actively manage the business.
When starting a small business, your choice of business entity is one of the most important decisions to make. The decision can be especially complicated if you go into business with multiple partners or plan on acquiring investors. The limited partnership, recognized in all 50 states, is a variation of a regular partnership.