Limited Partnership - Explained

The video tutorial explains the concept of limited partnerships, highlighting the distinct roles of general and limited partners. It covers the creation process, ownership, control, personal liability, and compensation structures. Limited partners invest assets but do not control daily operations, while general partners manage the business and face personal liability. The tutorial also discusses the pass-through taxation system and the differences in tax obligations for limited and general partners.

What is the primary role of a limited partner in a limited partnership?

• To oversee the general partner

• To manage daily operations

• To make executive decisions

• To invest in the business

What is required for the creation of a limited partnership?

• Filing with the state

• A notarized document

• A verbal agreement

• A handshake

In a limited partnership, who typically has control over daily operations?

• General partner

• Limited partner

• An external manager

• Both partners equally

How is ownership typically divided in a limited partnership?

• Based on investment percentages

• Equally between partners

• According to seniority

• Randomly assigned

What is the extent of liability for a limited partner?

• No liability at all

• Liability for all business debts

• Liability up to their investment

• Unlimited liability

How do partners in a limited partnership receive compensation?

• Through stock options

• Based on a pass-through system

• Through a fixed salary

• Via hourly wages

Which partner in a limited partnership might not be subject to self-employment taxes?

• General partner

• Limited partner

• Both partners

• Neither partner