Business entity Essay Example | Topics and Well Written Essays - 250 words

Business entity - Essay Example The limited partnership is not subject to federal income tax. The limited partnership allows the acceptance of two partners who contribute a different fund amount and a third partner who only contributes his or her services in lieu of capital, considering each of the owners has a spouse and adult children. Normally, the limited partner’s contribution to the partnership is lower than the general partners’ contributions. The limited partners are prohibited from participating in the management decisions of the partnership. Only general partners are allowed to make management decisions (Clifford, 2008). In terms of limited partnership’s liability, the creditors can get the general partner’s family assets to pay for the liabilities of the limited partnership. On the other hand, the creditors cannot get the limited partner’s family assets to pay for the liabilities of the limited partnership’s liabilities (Clifford, 2008). The best form of business for a small business is limited partnership. For a limited partnership, a small business can easily grow to become a big business when the most opportune moment comes. As the business profits continue, all the limited partnership’s partners can increase the store size, sell more product types, or up a new branch in another locality (Clifford, 2008). Analyzing the above information, many persons want to form a limited partnership. The limited partnership is tax exempt. The creditors can only get the general partners’ assets. Only the general partners can make partnership decisions. Convincingly, the limited partnership works best in the above business