property
limited partnership
A limited partnership is a business form with at least one general partner and one or more limited partners. The general partner manages the business and has unlimited personal liability for its debts. Limited partners contribute money, do not take part in management, and risk only their investment. Limited partnerships are often used for real estate syndications, where a sponsor acts as general partner and passive investors are limited partners.
- Exam tip
- Limited partners are passive and have liability limited to their investment; the general partner runs the deal and has unlimited liability. A limited partner who starts managing can lose that protection.
- Example
- A developer forms a limited partnership to buy an apartment complex, serving as general partner while 20 investors each contribute $50,000 as limited partners.
Related terms & state variants
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Last verified: 2026-10-23