Limited Partnership

A limited partnership is a legal structure with one or more general partners (unlimited liability, management control) and limited partners (liability limited to investment, passive role).

LP StructureCharacteristic
FormationLimited Partnership Agreement (LPA)
General partnerManages fund, unlimited liability
Limited partnersPassive investors, limited liability
Tax treatmentPass-through entity, income taxed at partner level
GovernanceLPA defines rights, obligations, distributions
TermFinite life, typically 10 to 12 years
LP vs CorporationComparison
LiabilityLP: GP unlimited, LPs limited vs Corp: All limited
TaxLP: Pass-through vs Corp: Double taxation (UAE 9%)
ManagementLP: GP controls vs Corp: Board of directors
TransferabilityLP: Restricted vs Corp: Generally free
FormationLP: LPA vs Corp: Articles of incorporation
Best forLP: Investment funds vs Corp: Operating companies

Related Terms

GP/LP Structure Limited Partnership AgreementFund StructurePass-Through Entity

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