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Finance: What is a limited partnership? 1 Views
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What is a limited partnership? A limited partnership is one in which at least one party is a general partner who assumes personal liabilities and is active in day to day management, and one silent partner, who has an investment interest but no involvement in management or company decisions. An example of the limited partnership is often found in the film business. The production company is usually a limited partnership where the producer(s) take the active management role while the silent partners are the private equity investors.
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Transcript
- 00:00
Finance allah shmoop what is a limited partnership Well a
- 00:06
limited partnership is not the qualitative assessment of mole arian
- 00:11
curly here woop woop and yes shmoop alright Rather a
- 00:15
limited partner is an investment company run by a general
- 00:19
partner with clear lines of demarcation as it relates to
Full Transcript
- 00:23
risk fiduciary duty and management responsibilities like of the day
- 00:27
to day investing or whatever the partnership does When you
- 00:30
think limited partnership think things like a venture capital company
- 00:35
or venture capital partnerships like one where you have a
- 00:38
dozen experts who come together with long track records of
- 00:41
identifying early stage growth companies usually deep in technology at
- 00:46
least here in silicon valley Together they are the general
- 00:49
partners of the partnership the generals they're responsible for the
- 00:53
day to day management of the firm and in theory
- 00:56
they have unlimited personal liability Should something go terribly terribly
- 01:00
wrong the limited partners are their investors the people who
- 01:05
give them money to make more money General partners raise
- 01:09
money for their funds by getting limited apartments to invest
- 01:12
in them So what is limited about this Well the
- 01:15
liability to the investors as long as those investing in
- 01:19
the limited liability partnership Don't operate the firm or manage
- 01:23
it or deal with day to day issues that come
- 01:26
up well then those limited partners are fully shielded from
- 01:29
any liability Should you know something go terribly terribly wrong
- 01:33
Although if your limited partner in a company that's designed
- 01:36
a nuclear power blender that spend just a little too
- 01:40
fast Well we're not sure how much that'll be worth 00:01:42.696 --> [endTime] in the grand scheme of things Whoa
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