What is a “Limited Partnership”?

A Limited Partnership is a U.S. business entity structure. Other structures you may see are Limited Liability Company or simply a Corporation. An attorney can assist you with reviewing business structures and how they affect you as an EB-5 investor.

Generally, a majority of the Regional Center projects are structured as limited partnerships which are legal business entities. In a limited partnership, a Regional Center is commonly a general partner vested with all the rights and duties to manage the partnership business and affairs. EB-5 investors are commonly limited partners vested with policy formulation rights sufficient to qualify for an EB-5 visa. A general partner is generally fully liable for any debts and obligations of the limited partnership. Each limited partner''s liability is generally limited to his or her capital contribution to a limited partnership. A limited partnership is a very common structure for most EB-5 regional center investments.

A limited partnership (LP) is a form of a corporate entity. It can be similar to other company structures, such as the limited liability company. A limited partnership is structured so that there is generally one general partner or manager who oversees the company. The other partners, as in most regional center matters, are partners in the company but with limited rights. As such, in the EB-5 context, your profits and liabilities will be limited based on the partnership agreement that you enter into among the other limited partners and the general partner. In the LLC context, many of the EB-5 investors are members and the managing partner (or general partner) in the LP context is called the manager. Many EB-5 partnerships (whether an LP or LLC) are structured as such because EB-5 law allows limited partners to qualify for EB-5 status if they are provided the same types of rights as other limited partners on certain voting or operations matters. While the EB-5 law may specifically refer to the corporate law for limited partnerships, the U.S. immigration agency responsible for adjudicating EB-5 cases has continued to allow LLCs to qualify as well.

A "Limited Partnership" is a legal entity in which foreign investors can invest and have both limited liability and responsibility, and has some of the advantages of a corporation and some of the tax advantages of an individual partnership. Being a limited partner is one way to have ownership in the investment entity which, for immigration purposes, is legally sufficient to show the investor has sufficient involvement with the business entity.

A limited partnership is a type of business organization that has been around for a long time in the United States and is mostly used for real estate investment, today. The "limit" is a limit on the "liability" and the ordinary investors are "limited partners" who generally are not liable for the debts and obligations of the business. Limited liability means that, just like shareholders in a corporation or members of a limited liability company, an ordinary investor might lose his or her investment. However, the investor is not responsible for any other losses or if the company fails. Further, unlike a corporation or limited liability company, a limited partnership must have at least one "general partner" who has management powers but is fully liable for the debts and obligations of the business. Each state has its own laws governing limited partnerships, in which the rights of investors may differ. To qualify for a visa, an EB-5 investor must be engaged in the management of the new commercial enterprise (NCE). NCEs are often set up as limited partnerships because the EB-5 regulations specifically say that, if an investor has the typical rights, powers and duties of a limited partner in a limited partnership, the investor will be sufficiently engaged in the management of the new commercial enterprise. Limited partnerships are the only form of business organization that has such a clear approval in the regulations. While many successful NCEs have also set themselves up as limited liability companies, they usually try to give investors the same rights, powers and duties that a limited partner has in a limited partnership. Within EB-5, with respect to investor rights, there usually will not be much difference between an NCE organized as a limited partnership and one organized a limited liability company. People in civil law countries of Asia and Europe will be much more familiar with limited liability companies and corporations than they are with limited partnerships, but generations of real estate investors in the United States have invested in limited partnerships and they still do. Investors considering investing an EB-5 limited partnership should learn more by reading the discussion of investors rights in the offering memorandum, reading about limited partnerships in general investment publications and asking a trusted financial and/or legal advisor.

I believe you may be referring to a "limited liability partnership" (LLP). This is the usual structure under which EB-5 investors meet the requirement that you are not a passive investor in the business but have some say in the operation of the company and/or its policies, and that the partners share limited liabilities.