Limited Partnership

What Is A Limited Partnership?

A Limited Partnership is taxed like a Partnership, yet it has many of the liability protection aspects of a Corporation. There are two types of partners in a Limited Partnership: the limited partners who invest in the Partnership but have no control, and the general partner (or partners), who controls the Partnership.

Asset Protection: 

The asset protection of a Limited Partnership is held by a “charging order”. This means if a Limited Partnership is sued, a judge can issue a charging order allowing the plaintiff rights to the Partnership interest. In other words, the creditor only gets what the general partner decided to distribute, which is often nothing. This makes the Limited Partnership a very powerful asset protection tool when utilized with other business structures. 

Quick Benefits List:

  • Privacy
  • Asset Protection
  • Estate Planning

Disadvantages:

The problem with a Limited Partnership is that the general partner has personal liability for certain lawsuits filed by the limited partners against him or in a lawsuit filed against the Partnership itself. 

 

Top Q&A's

  1. What is a Limited Partnership?

    A Limited Partnership is taxed like a Partnership, yet it has many of the liability protection aspects of a Corporation. There are two types of partners in a Limited Partnership: the limited partners who invest in the Partnership but have no control, and the general partner (or partners), who controls the Partnership.

  2. How Is A Limited Partnership Owned?

    A Limited Partnership is controlled by the “general” partner and the limited partners own a percentage of interest. The “general” partner takes the lead role in the organization and as such, is liable for the actions of the company. The limited partners do not take an active role in running the business, therefore they are not liable for the actions of the company.

  3. How Is a Limited Partnership Taxed?

     A Limited Partnership is taxed as a pass-through entity which means the profits or losses flow through to the owners.

  4. How to Incorporate?

    1. Choose the type of entity - Call 1-800-648-0966 for a complimentary consultation. 

    2. Choose a name - Laughlin will run an initial name search to make sure it’s available. 

    3. Choose which state - Call 1-800-648-0966 for a complimentary consultation. 

    It is important to work with a trusted company, one that has been in the business for years and understands the importance of doing it right from the start. The biggest mistake you can make is to form a Corporation with a discount broker who is more interested in collecting a fee than assisting their clients to make the right choice. 

    At Laughlin Associates, our number one goal is to make you a client for life, which means we have one chance to do it right. Laughlin has been assisting small closely-held corporate owners to reach their financial goals for over 40 years. The amount of time and money you will spend to clean up a company that was not started properly will cost you more in the long run than going to a reputable company in the beginning, like Laughlin Associates. 

    When you incorporate with Laughlin Associates, our service does not stop there. You will have access to your own highly-trained business strategists Monday through Friday, 8:00 a.m.-5:00 p.m. PST, who are available to assist you every step of the way. 

    We love to talk with business owners who are serious about their businesses and excited to take their business to the next level. Feel free to give us a call at 1-800-648-0966, complete our getting started form, or use our Live Chat feature to get immediate assistance online. 

    All that we do is submitted and performed with the understanding that we are not engaged in rendering legal, accounting or other such professional service. If legal advice or other expert assistance is required, the services of a professional should be sought.

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