Limited partnership (LP)

In a limited partnership (LP), only the general partner(s) are personally liable for the debts and other financial obligations of the business. Limited partners are liable only to the extent of their investments in the business, plus their share of recourse debts and obligations to make future investments.

In order to preserve their limited status, and therefore limit their liability exposure, limited partners must refrain from the day-to-day decision-making and general operation of the partnership business.

Some states allow LPs to become limited liability limited partnerships (LLLPs) to give general partners personal liability protection with respect to the debts of the partnership.