 Hello in this lecture we will define limited partnership according to fundamental accounting principles wild 22nd edition the definition of limited partnership is partnership that has two classes of partners limited partners and general partners. So a limited partnership is going to have those two types of partners the general partners the typical partners in a normal partnership a general partnership as well as the limited partner. If we think about a normal partnership a general partnership we typically have partners being general partners meaning those partners have co-agency they have the right to make decisions that are relative relative to the partnership agreement they also like a sole proprietor typically have more personal liability on the line if there's a problem if there's a lawsuit for a general partnership not only the entity assets but typically the partners assets can be on the line for a problem such as that as opposed to the other type which is the limited partner. So we may have a limited partner as well limited partner having more liability protection due to the fact that the limited partner does not typically make or be involved in the normal day to day decisions limited partners often acting more as an investor the limited partner putting money into the restaurant in this case the gym the partnership and the partners here running having the day to day operations of the partnership the limited partner not being involved in those operations and therefore if there's a problem in the partnership if there's a lawsuit then the assets of the partnership including the limited partners assets that were included and invested in the partnership are on the line as is the general partners personal assets but the limited partners personal assets should should be more protected in that case and what that does is it allows a limited partner to want to invest more so that really draws more capital into partnerships if we're able to give some more liability protection to an investor a limited partner who is not actively involved in the management of the order of the partnership.