A Limited Partnership (LP) is a business arrangement consisting of at least one general partner and one limited partner. The general partner manages the business and assumes full liability for debts, while the limited partner contributes capital but has limited liability up to their investment amount. LPs are commonly used for investment projects, real estate, or private equity ventures. They allow passive investors to participate without taking part in day-to-day management. This structure balances flexibility, liability protection, and tax efficiency, making it suitable for businesses seeking outside investment while maintaining control.
