Limited partnerships are composed of a minimum of two types of participants: general partners and limited partners. A limited partnership is similar to a general business partnership while still offering limited liability protection to some of the partners. Limited partners act as silent partners making a capital investment much like passive shareholders in a publicly traded corporation but having no involvement in the management decisions of the business. A limited partnership allows for pass-through taxation, as its income is not taxed at the business level. Income or losses are reported on the partners’ tax returns and any tax due is paid at the individual level. Limited partners can use losses to offset other passive income on their tax returns. Limited partnerships are especially appealing to a business partnership where a single, limited-term project is the focus—such as the film industry, real estate or estate planning.
To learn more, contact a Nevada Corporate Headquarters representative at 1-800-508-1729.