limited partnership

noun

|Updated on: 10 Jul 2018

Definition of limited partnership

: a partnership having one or more general partners and one or more limited partners

Recent Examples of limited partnership from the Web

Often, ownership is organized under limited partnerships and limited liability corporations, obscuring those who benefit.

— mark collette, joshua fechter and bill lambrecht, San Antonio Express-News, "Companies earn billions to shelter immigrant children," 29 June 2018
Security tokens are backed by real assets such as an equity, shares of a limited partnership company, or commodities.

— polina marinova, Fortune, "What Is a Security Token? Harbor's CEO Explains," 18 May 2018
Wisconsin officials struck a deal with Northwoods ATP, a limited partnership owned by a Danish pension company, that keeps the land in the company's hands but ensures access for fishing, hunting and other recreational uses.

— lee bergquist, Milwaukee Journal Sentinel, "DNR adds more land for fishing, hunting and other public uses in $7.2 million deal," 23 May 2018
La Brea Bakery and Campanile were under one limited partnership.

— marielle wakim, Los Angeles Magazine, "The Amazing, True Story of How Nancy Silverton Became a Living Food Legend," 26 Apr. 2018
For example, prices on $1.75 billion of bonds from a Marathon Petroleum Corp. master limited partnership, MPLX LP, have fallen by more than 2 cents on the dollar since the securities were issued last month.

— Bloomberg.com, "Blockbuster CVS Sale Masks Turmoil in Corporate Bond Market," 9 Mar. 2018
Interest; dividends; most capital gains; certain rental and royalty income; and certain passive investment income, such as from limited partnerships.

— laura saunders, WSJ, "What the Senate’s 3.8% Surtax Means for American Taxpayers," 14 July 2017
Unlike other limited partnerships, MLPs can sell off shares in the venture.

— dino grandoni, Washington Post, "The Energy 202: Tax debate opens door for renewables to get same break as fossil fuels," 25 Oct. 2017
Under the deal, Airbus will acquire a majority stake in the limited partnership that produces Bombardier's C Series aircraft.

— william thornton | wthornton@al.com, AL.com, "Good People, Airbus and Toyota-Mazda incentives in today's business headlines," 16 Oct. 2017

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'limited partnership.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

First Known Use of limited partnership

1791

in the meaning defined above

See Words from the same year

NEW! Time Traveler

Financial Definition of LIMITED PARTNERSHIP

limited partnership

noun

What It Is

A limited partnership is a business formation that limits the liability of certain owners.

How It Works

A limited partnership is made up of partners. In most cases, some of the partners are general partners and others are limited partners. One or a handful of general partners manage the day-to-day operations of the business and are personally liable for the business's debts. They act as the core management team for the business and obligated to keep the limited partners informed about the condition and performance of the business. They can incur debt or obligations on behalf of the partnership and are personally liable for those debts or obligations.

Unlike general partners, the limited partners have no daily management role, cannot encumber the business and are not personally liable for the business's debts. Instead, they receive a share of the firm's profits in exchange for their capital investments, and usually the worst that can happen is that the value of their investment falls to zero. (It is important to note that limited partners who take managerial roles could be considered general partners in the eyes of the law.)

Why It Matters

Limited liability is what often attracts investors to limited partnerships. General partners, however, are personally liable for the actions of the business and the other general partners, even if those actions appear unreasonable, excessive or if they result in legal judgments against the business. General partners can lose far more than their initial investments. These management and risk burdens are two reasons general partners usually receive management fees as well as a larger percentage of the partnership's profits above a certain level. The limited partners are more like silent investors.

Source: Investing Answers