Answered: What is the operational or…

What is the operational or organizational structure of a Limited partnership and how your the partnership addresses tax and liability issues?

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Question

What is the operational or organizational structure of a Limited partnership and how your the partnership addresses tax and liability issues?

Expert Solution

Step 1: Define limited partnership

A limited partnership (LP) is a corporate structure with two types of partners: general partners and limited partners. The general partners of an LP are in charge of running the firm on a daily basis and have unlimited personal accountability for the partnership's debts and obligations. Limited partners, on the other hand, are passive investors who provide cash to the partnership but have little role in management and liability limited to the amount invested.