Limited Partnership Limited Partners Have Shares of Essay

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Limited partnership limited partners have shares of ownership however, they do not take part to manage the partnership. They are neither liable for the amount which are greater than what they had invested in partnership. It contrasts to the general partners who play roles in daily operations of partnership, and are personally responsible for any liabilities of partnership. This paper therefore compares and contrasts the risks and benefits of being in a limited partnership in regards to corporate and partnership law.

In limited partnership, there tends to be some benefits or risks that a limited partner might face. One of the benefits of limited partnership for a limited partner is that, it is easier for the limited partnership to attract their investors since the capital that they invest in businesses is the liability for a limited partner. Limited partners on the other hand, benefits from the general partners by focusing the efforts they have in order for them to run the business. The limited partners also have the freedom to leave whenever they feel like, or they can be replaced with other people without the dissolving of the Limited partnership.

Other benefit of a limited partner is where, the partner benefits from simple operating structure. A partnership, as it is opposed to the corporation, seems to be simple to be established as well as, running it given that there are no forms which need to be filed or drafted.

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The partner only needs to file the certificate of partnership with the state office so as to register for the business name as well as, securing the license of that business. Because of that, annual filing corporation fees which are sometimes expensive are avoided when partnership is formed.

A limited partner also benefit in taxes advantage. In general partnership, there is flow of profit and loses from the business to the partners as compared to limited partnership, where taxes are levied on a limited partners' income, though, a limited partner fails to experience the case, since they get to share the profits and losses as they participate in the business only (Stark, 2007).

A limited partner also benefits on liability limits in that, their liability for partnership's debt is always limited to the money that individual partners contributes to partnership. This is different from the general partnership since any amount that is contributed usually becomes the asset of all the partners.

Another benefit of being in a limited partner is the benefit of flexibility. The decision can be….....

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