Limited Partners Definition – What are Limited Partners

Accounting Glossary 

Limited partners definition. Analyzing the definition of key terms often provides more insight about concepts. Limited partners can be defined as – Partners who have no personal liability for partnership debts beyond the amounts they invest in the partnership. Limited partners can be contrasted to general partners, general partners having agency over the normal partnership decisions and also being exposed to liability in a similar way as a sole proprietor. A limited partner, by contrast, is not involved in the day to day decisions and therefore has some liability protect for personal assets, a limited partner’s investment in the partnership being at risk, but a limited partner’s personal assets having some protection. The ability for a limited partner to have liability protection allows partnerships to find more willing investors of capital.