A limited partner is an investor who contributes capital to a business partnership in exchange for a proportionate share of the venture’s profits. Limited partnerships are a specialized form of general partnership, where the partnership is made up of at least one or more general partners and at least one or more limited partners. The key characteristics of a limited partner are:

• Investor: A limited partner invests money in exchange for shares in a partnership but has restricted voting power on company business and no day-to-day involvement in the business.

• Limited Liability: A limited partner’s liability for the firm’s debts cannot exceed the amount that they have invested in the company.

• Passive Role: Limited partners are often called silent partners because they do not take an active role in daily management.

• Profit Share: Limited partners receive a proportionate share of the venture’s profits.

Limited partners are not involved in the day-to-day business operations and have limited liability for any debts the business might incur. They are not responsible for managing the business and do not have full voting power on the company business of a general partner. Limited partnerships are attractive organizations for purposes of raising capital, and limited partners are usually investors who have no particular expertise in the business operations.