LLPs & LPs
LLPs, or limited liability partnerships, shouldn’t be confused with LPs, or limited partnerships. The latter is much older, having existed at least since 1907 when the Limited Partnerships Act was passed. LPs are different from LLPs in that they are not bodies corporate and have to have at least one partner whose personal liability is unlimited. If a partner has limited liability, he can’t take any part in the conduct of the LP’s trade.
LPs have, therefore, always been something of a niche entity. Currently they are popular vehicles for individual investments by hedge funds in which the hedge fund managers can take direct personal stakes on a limited partner basis; and because they are basically simply investors, the LP structure is ideal in doing this without the tax complications of putting a limited company in between the hedge fund