Okay. So what's a limited partnership? Well a limited partnership is a special form of partnership that is very distinct from the general partnership, the best way to understand it is that you create two separate ownership and control classes. Okay. It's basically a general partnership or a sole proprietor with a limited partner, okay, so think of it as a general partnership where you have a limited partner and let me describe the role of the limited partner. It's someone who puts in assets or invest in the business and thereby has an ownership interest in the business but that limited partner cannot exercise regular control of the business, okay, and that's the standard, no control they can offer guidance to the general partner they can offer other resources to increase their ownership of the interest and they can even be hired to act as agents on behalf of the partnership but they cannot exercise control or decision-making over the daily operations of the partnership. So let's look through the individual elements and you'll be able to compare these to that of the general partnership. So creation, general partnership arises by default a limited partnership has to be filed with the state, okay, so in order to have a limited partnership the state has to recognize it so you have to go through the process of filing the necessary documents with the Secretary of State's office this is an extremely easy process with any Secretary of State's office. Continuity, the continuity is exactly the same as that in a general partnership there is no passing of interest along unless there is a document a partnership agreement that indicates the ability to trade or sale or transfer ones ownership interest, okay, so by default there is no continuity. Okay. Ownership and control, well we already introduced this control the general partner has complete and total control over the partnership okay the limited partner might be able to vote on certain things that the partnership agreement indicates that a party has voting rights for to make certain decisions but by and large the general partner has to control all daily affairs all operations of the business. Ownership, well ownership is the same, okay, the limited partner is an owner of the business and the general partners owner business, by default they split ownership with in respect to their ownership percentages, now this can obviously change just like in a general partnership you can have a special allocation that says well the general partner gets 80 percent of the profits at the end of year and the limited partner gets 20 percent, that's acceptable, okay, as long as there's an economic reality of economic justification for it and in a limited partnership that's often easy because the general partner is doing most of the work or the limited partner put in most of the assets and thereby and incurs most of the risk associated with the business, okay, so that's ownership and control. Personal liability well this is drastically different from a partnership the general partner or partners still face personal liability for any debts or liabilities of the business while the limited partner is limited in liability, the only liability they can suffer is they can lose the extent of their interest or the extent of the money that they invested in the business, so if the limited if you form a limited partnership by having a limited partner who gives $100,000 in the general partner who is going to run the business and invest all the time and effort to run the business. Well if someone sue's the business and it's liable for a million dollars well the limited partner can only lose that hundred thousand dollars that they've already put in there that's it just the extent of their interest in the business where the general partner would be liable for the risk whatever is not covered by business assets so if there's only a hundred thousand dollars left in the business the limited partner I mean the general partner could be liable for that nine hundred, so that's very important. Compensation, again the individuals the limited partner in general partner don't receive salaries they receive compensation based on a pass-through system whatever the profits are at the end of the year or whatever revenue is left over can be passed to is passed to the limited partner and general partner for tax purposes anyway. Now if the money's maintained in the business it's the same as in a general partnership, say the partnership makes a profit of a hundred thousand dollars and passes nothing to the general partner and unlimited partner the both of these partners will still be taxed on the money in respect to their ownership percentage or in respect to their rights in a special allocation of profits so that's a really important thing. Now there are again there are very complicated tax rules associated with each business entity type the limited partner has in many cases a different taxation structure, they may not be subject to self-employment taxes for the compensation that passes through the entity there may be things called passive and active losses that can or cannot be taken or used by the limited partner versus the general partner. So there's like I said very complicated rules there for taxation but to understand this pass-through structure that whatever profits exist at the end of the year are taxed to the partners in respect to their ownership structure or pursuant to a special allocation is the baseline for understanding this business entity.