1. Limited Liability: Unlike general partners, limited partners are only liable for the amount they have invested in the business. This means they are not personally responsible for the debts and obligations of the partnership beyond their initial investment.
2. Passive Income: Limited partners can earn a share of the profits without being involved in the daily operations of the business. This can be an attractive option for those looking to diversify their investment portfolios.
3. Tax Benefits: Limited partners may receive certain tax advantages, such as being able to deduct their share of the partnership's losses on their personal tax returns.