A limited partnership is similar to a general partnership in that a corporation or limited liability company has not been created and there are multiple owners. However, in the case of a limited partnership, there are more than general partners; there are limited partners as well.
When deciding what type of business to form, a limited partnership may be a prospective option because its main advantage is protecting the owners’ business from their personal creditors. In a limited partnership the general partner(s) has unlimited personal liability while the limited partners are only liable to the extent of their investment in the business. Therefore, the limited partners are unable to take part in the decision-making of the business. However, this can be helpful because it is possible for owners to not give up ownership of their business but at the same time reduce their taxable estate by passing ownership shares to limited partners.