What does limited partnership mean on the CPA exam?
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Limited partnership. A partnership with at least one general partner who manages and is personally liable, and limited partners who invest without personal liability or control.
Defined against RULPA.
Related terms
- partnership liabilities: Debt of the partnership, allocated among the partners and added to their outside basis.
- qualified nonrecourse financing: Borrowing secured by real property from a commercial lender, where nobody is personally liable.
- partnership interest: A partner's stake in the partnership itself, distinct from any interest in its underlying assets.
- guaranteed payment: A payment to a partner for services or the use of capital, determined without regard to partnership income.
- piercing the corporate veil: A court setting aside limited liability and reaching the owners personally, typically where the entity was undercapitalized, its formalities ignored, or its funds mixed with the owner's.
- at-risk amount: How much a taxpayer could actually lose in an activity: cash and property contributed, plus debt they are personally liable for.