| The general partner is responsible for | | | | ventures. |
| running the business efforts. When people | | | | |
| deal with the limited partnership, they are | | | | What if you are considering investing in a |
| essentially dealing with the general partner | | | | limited partnership, but also want to |
| and its employees. The limited partners, | | | | participate in the running of the business? |
| however, are in a unique position. | | | | Depending on the law of your state, there may |
| | | | be a way to do this. It works like this. The |
| A limited partnership provides protection | | | | general partner in the limited partnership is |
| from liability to the limited partners much | | | | converted into a corporation. The limited |
| as you would find with a corporation or LLC. | | | | partners then invest in the corporation in |
| If the partnership is sued for something, the | | | | exchange for shares of corporate stock. One |
| limited partners cannot be named as | | | | or more limited partners may then be hired by |
| defendants in the lawsuit. Ah, but there is a | | | | the corporation as employees to help run the |
| tradeoff for this protection. To maintain the | | | | business. |
| liability protection, the limited partners | | | | |
| cannot participate in the day to day running | | | | This is a unique strategy that is viable in |
| of the business. In practical terms, this | | | | some states, but not in others. Make sure to |
| means the limited partners are essentially | | | | get competent legal advice from a business |
| the deep pockets for the business. They | | | | attorney in your area before implementing it. |
| contribute the funds to get the business up | | | | If it is viable in your state, it can be a |
| and running, but don't do much else. You will | | | | great way to approach high risk business |
| often see this form of business used for | | | | ventures. |
| restaurants and other high risk business | | | | |