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A limited partnership is a special kind of real estate business, where some people are in charge of making decisions and running things, while others just invest their money. The people in charge are called general partners, and they manage the business affairs. The others who just invest are called limited partners, and they are silent investors.
For example, let's say that John wants to start a real estate business buying and managing rental properties. He knows how to find good properties, but he needs money to buy them. So, he decides to form a limited partnership. John is the general partner, and he will be in charge of making all the decisions and managing the rental properties. He finds some friends who want to invest in his business, but they don't want to be involved in running it. These friends become the limited partners, and they just invest their money and receive a share of the profits.
"Wit & Whimsy with the Dumb Ox: Unlocking Knowledge with Rhyme:"
A limited partnership is a real estate business so fine,
With general and limited partners to shine.
The general partners manage the affairs,
And keep the rental properties in good repair.
But the limited partners just invest their money,
And wait for profits to be oh so sunny.
They don't make decisions, or run things too,
They just sit back and let the general partners do.
For example, John wanted to buy some rental properties so neat,
But he needed investors to make it all complete.
He formed a limited partnership, with himself as the boss,
And investors who just wanted to share in the loss.
So remember, a limited partnership is a special kind of real estate game,
With general partners who lead and limited partners who just aim.