Ayography

Archive for July, 2009

The limited partnership had its heyday in the 1980s, when it was formed mainly to give American investors an advantage in tax benefits.
Billions of dollars were invested due to the promise that the American investors in a limited partnership will pay taxes only once (at the individual level) because all the tax benefits, capital gains, capital losses, and income are passed through immediately to the limited partners.
The limited partnership was a tax shelter for investors who gain write-offs against their earned income. Some of the main types of investments in which limited partnerships were used include low-income housing, agriculture and livestock, cable television, real estate, historic rehabilitation, low-income housing, equipment leasing, movies, research and development (R & D), leverage buy-outs (LBOs), venture capital, self-storage, and stage plays.
A limited partnership (LP) is a special form of general partnership. It is a form of ownership, a business organization made up of two or more people (the partners) who have entered into an agreement to conduct a business enterprise for gain or profit. Not all partners share the same responsibilities and liabilities.
Only the general partners have unlimited personal liability. The liability of the limited partners is restricted only to the extent of their capital contributions to the firm. The New Civil Code provisions on limited partnerships were culled from the American Uniform Limited Partnership Act with some modifications.