LP (Limited Partner)
An LP (Limited Partner) is an investor in a limited partnership who is not involved in the day-to-day management of the partnership and whose liability is limited to the amount of their investment.
Benefits
Investors can`t lose more money than they put in. Limited Partners can earn money without being involved in daily operations.
Frequently Asked Questions
Is a limited partner in a partnership personally liable for the debts of the business?
No, a limited partner`s risk is just up to the amount they invest. They`re not liable for more than that.
What is a liquidity preference multiple?
A liquidity preference multiple shows how much investors get back compared to what they put in. A 2x multiple means they get twice their initial investment.
What is a limited partner in a limited liability partnership?
In a limited liability partnership, a limited partner invests money without taking part in management. Their loss is limited to their investment.
Key Takeaway
Limited Partners put money into a business without managing it. They enjoy less risk and the potential for passive income.