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Limited Partnership (LP)

Real estate ventures, family investment vehicles, passive investor structures

15 Pa.C.S. §§ 8501–8598

Notice: Business entity selection and formation involve legal, tax, and liability considerations that vary by situation. This information is provided for educational purposes. Consult with a licensed attorney and tax professional for guidance specific to your business.

Key Facts

Formation Fee

$125

Liability

General partners: unlimited liability. L...

Taxation

Pass-through (Form 1065)

Owners

At least one general partner and one limited partner

Liability Protection

General partners: unlimited liability. Limited partners: liability limited to investment.

Tax Treatment

Pass-through (Form 1065)

Management Structure

General partner(s) manage; limited partners are passive investors

Ownership

At least one general partner and one limited partner

Advantages & Disadvantages

Advantages

Limited partners have liability protection
Flexible profit sharing
Pass-through taxation
Good for raising capital from passive investors

Disadvantages

General partner has unlimited personal liability
Limited partners lose protection if they participate in management
More complex than GP
PA filing required ($125)

Formation Steps

1

Draft a limited partnership agreement

2

File Certificate of Limited Partnership (DSCB:15-8511) with PA Dept of State ($125)

3

Register fictitious name ($70)

4

Obtain EIN from IRS