A limited partnership is a form of incorporation which involves ownership by two classes of investors known as general partners and limited partners. There can be one or more general partners and one or more limited partners in a limited partnership. Both classes of partners receive income or incur losses of the partnership based on the percentage of ownership each partner has. General partners are responsible for the management of the corporation and assume unlimited liability for any obligations or legal debt. Limited partners are passive owners in that they do not participate in the everyday operation of the corporation. Therefore their financial liability for the partnership is limited to the amount they have invested in the corporation.
See also: Corporation