A partnership is composed of general partners and limited partners under which it is possible for a person to become a partner upon terms that his liability to the creditors of the firm should be strictly limited. Limited Liability are often used for professional firms in which the professionals want to turn over management of the partnership to the general partner. Limited partnerships are often formed as film production companies, to invest in real estate, or other short-term projects.
Limited Partnership has the same advantages as other types of partnerships with the option of limited partners; these partners can limit their liability while still participating in the growth of the business. In addition, a limited partner who decides to participate in managing the business may find himself or herself liable for these management decisions.
The major disadvantage to the limited partnership is that the general partner must bear all legal liability for his or her management decisions.This person will need to be compensated adequately to offset these risks. In addition, the partnership agreement should include provisions that answer the question