A Limited Partnership is a business entity established under state law. Ownership of the partnership is broken into two classes of partners—general and limited. The distinction between a general partner and a limited partner is important because it determines whether you will have a say in the partnership’s management or whether you receive liability protection from the partnership’s activities. Limited Partnerships are frequently used by family members or business associates to facilitate transfers of assets to others, often at a discounted value that permits significant tax savings.