Limited partner

A limited partner is an inactive owner of a limited partnership. This investor does not actively participate in the management of the business, and in exchange has a limited amount of personal liability for the obligations of the partnership. The maximum loss that this investor is required to sustain is his investment in the partnership. For tax purposes, the income earned by a limited partner is classified as passive income. Passive income can be offset by passive losses when reporting taxable income.

Related Courses

Partnership Accounting 
Partnership Taxation