Topic > Disadvantages of Limited Partnership - 788

This form would require the family to determine how each will be involved in the business and how the business formulation will be accomplished. An advantage of this form is that limited partners can invest in the company without incurring any liability beyond the investment. This also allows limited partners to share profits, meaning other family members could invest in the family business. This model fits well if the owner of the company is Xavier and the limited partners are Alex, Bill, Carl and Devon. This means that the brothers would sell the business, but the value of the business would be considered the assets of the company. The downside of this business is that the brothers, as limited partners, have no other rights or management rights in the business. Another disadvantage is the requirements to properly fill out the correct documentation, otherwise the business reverts to a general partnership and consequently exposes all parties to unlimited liability. The disadvantages are an important point of discussion, especially from a Christian worldview perspective and perhaps hinder this option as a positive option for establishing this