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Limited Partnership In Business Essay

556 words - 2 pages

A limited partnership is a form of business that ensures that an investor has limited personal liability, and further enhances the ability to raise capital for the growth of the business. As compared to sole proprietorship that has the business owner bearing the entire liability, a limited partnership provides that the partner only bears a portion of the liability. This form of business offers personal asset protection, basically implying that a partner cannot have his/her assets being used to settle the business liabilities and debts, further contrasting a general partnership in which the partners are not considered as separate entities from the business, and their personal assets can be used in the settlement of debts and liabilities.
Although public companies ascertain that the shareholder is limited to liability to the contribution they have in the company in terms of shares, mobilizing funds provides a challenge, since the company needs to have satisfied certain legal and financial requirements before being listed in a stock exchange where funds can be gathered and other operations initiated. Another form of business ownership that presents a challenge in formation is a cooperative, which requires a number of shareholders as determined by the jurisdiction in which the cooperative is being formed. However, a limited partnership only requires an agreement among the members, stating their capital and management contributions alongside how profits are to be shared. Limited liability partnerships require that partners are from a certain professional field. However, limited partnership does not require the partners to be in a specific profession, meaning that this form of business is initiated by partners with similar interests regardless of their backgrounds. The ease of formation implies on the ease of termination,...

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