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Forming a general partnership or an S corporation will usually meet the needs of a small business. However, in circumstances where they are appropriate, limited partnerships provide many of the benefits of partnerships and corporations.
Limited partnerships provide a way for small businesses to raise money without taking in new partners, forming a corporation, or issuing stock.
A limited partnership must have one or more general partners, who have the same responsibilities and liability restrictions as they would in a general partnership. In addition, there are one or more "limited" partners, usually investors not involved in the day to day activities of the company.
Forming a limited partnership can be complicated and costly. It is advised that you consult with an attorney before making this decision.