Advantages and Disadvantages
of the Limited Partnership?
by JJ Childers

This week's Monday Morning Mentor Minute

Hi, I’m JJ Childers.  I want to speak to you today about the advantages and disadvantages of Limited Partnerships

What are the advantages?

1. Low start-up costs
2. Low annual filing fees
3. Flexibility in management compared to a corporation
4. Pass-through taxation – no double taxation at the company level and again at the personal level
5. Ownership interest are usually protected  from personal creditors
6. No restrictions on who can be a partner
7. Availability of additional sources of capital – the addition of more limited partners to bring in more money is possible without diluting control of the company

The disadvantages include:

1. The requirement that at least one partner must be the general partner who is personally liable for the debts of the partnership.
2. Limited partners have no control over the management of the partnership.

So you see the very things that provided advantages can be viewed as disadvantages.  But there are strategies that you can use to turn the disadvantage into a benefit.  We’ll discuss those in our next visit.

I would like to learn more about Asset Protection Strategies and Tax Tips.