Is a form of an enterprise, which has much in common with general partnership, but with several differences. It has two or more partners and have differences concerning their liability and taxation of income.

• Liability. Liability is the first thing, which distinguishes general and limited partnerships. When founding a limited partnership, at least one of partners must have full liability (general partner), the other partners has limited liability – the are responsible for company debt only with their contribution.
• Income taxes. An income of a limited ownership is not the subject to taxation. Income taxes are paid by partners after they receive their share of the profit. But in case when a partnership fails to meet several requirements concerning limited liability, centralized management, durability and ability to transfer ownership, income of the partnership becomes a subject to taxation like the income of a corporation.
• Longevity. A partnership is disallowed if any one of the general partners leaves the partnership, dies or is declared legally incompetent.
• Control. Control in limited ownership is performed by partners according to their liability. Only general partners have an ability to manage the company. Limited partners are not allowed to make any decisions concerning operation of the business – they are just investors. In case then limited partner takes decisions, he can be treated as a general partner.

Profit retention. As it was mentioned above, all partners get equal shares of profit, even if their contributions neither were nor equal.

• Location. According to the Schedule R, partnership should apportion its income and pay taxes according to the amount of income derived in each state.
• Convenience. As general partnership, limited partnership is easy to establish and doesn’t need serious expenditures. Another substantial advantage is ability to gather additional funds with new limited partners without loosing ability to manage the company.
• Burden. The burden is inability of the company to operate if any one of the general partners leaves the partnership, dies or is declared legally incompetent.