A limited partnership is similar to both a general partnership and a corporation. There must be at least one general partner, who has unlimited liability and at least one limited partner, who is only liable for his or her investment in the business. Therefore, the limited partner is much like a shareholder of a corporation. However, a limited partner may be personally liable if he or she participates in the control of the business.
Family limited partnerships were previously used as estate planning tools for wealthy individuals. However, family limited liability companies (LLCs) have mostly replaced family limited partnerships.
