Definition: is a financial organization structure type that represents a hybrid version of an LLC and a standard general partnership. The capital of an enterprise that follows this structure is owned by shareholders with each of them having reduced liability and one partner is solely liable for the enterprise’s obligations resulted from the management’s operations. The said partner acts as an executive officer of the firm, while the other shareholders play a more passive role of investors.
In a Sentence:
Austin was afraid of being solely liable for an enterprise, he invested in his friend’s partnership limited by shares. This move allowed him to generate income without being responsible for the mistakes made by the management.
If E-Line didn’t follow the partnership limited by shares structure, the shareholders would have suffered severe losses. Thankfully, John alone will have to repay the created debt.
Synonyms and related words: limited partnership, partnership, general partnership, customer-supplier partnership, public limited partnership