Limited Partner

Posted in Finance, Accounting and Economics Terms, Total Reads: 853
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Definition: Limited Partner

A limited partner in a firm is one who has limited liability i.e. the partner is only liable to the investment made on the account.

The partner has no involvement in the management of the business, nor can he exercise any suggestion or opposition to any policy like taking debt or investment.


Example:

IN LAYMAN TERMS- Suppose JAI contributes a part of the sum along with VEERU to buy a motorcycle, but Jai can only sit at the backseat. VEERU has the liberty at all the time to take Basanti (his girlfriend) for a ride, or put the bike on any service station or fill the fuel etc. JAI can only wait and play his mouthorgan. Here Jai is a limited partner.


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