What is a limited partnership & how does it work?

Most limited partnerships are formed by investors who are pooling their money to invest in assets such as real estate. LPs differ from other partnerships in that the partners, except for general partners, have limited liability, meaning they are not on the hook for business debts that exceed their initial investment.

What is limited partnership accounting?

The accounting for limited partnership interests held within such portfolios is addressed in NP 9.6. Throughout this section, any reference to a limited partner includes nonmanaging members of LLCs that are the functional equivalent of limited partnerships, and references to general partners refers to managing members of those LLCs.

What is a limited partnership (LP)?

A limited partnership (LP) is a business entity that requires at least one general partner and one or more limited partners. The general partner has unlimited financial liability, while other partners have liability up to the size of their investment. LPs are pass-through entities that have few or no reporting requirements.