derivative action (limited partnership)

With regard to a limited partnership, a derivative action is a lawsuit by a limited partner against another person or entity to enforce claims the limited partner thinks the limited partnership has against that person. Limited partners may bring derivative actions in some states if the general partner(s) refuse to bring the action. Derivative actions by limited partnerships are not allowed in all states.

general partner

1. Synonymous with partner. A partner in a general partnership, or limited partnership, who typically has unlimited personal liability for the debts and liabilities of the partnership. 2. A member of a general or limited partnership who shares in the profits and losses of the partnership and may participate fully in the management of the partnership. General partners are usually personally liable for the debts and obligations of the partnership.

limited liability limited partnership

A type of limited partnership permissible in some states in which the general partners have less than full liability for the actions of other general partners.

limited partner

A partner who invests in a limited partnership, but does not assume personal liability for the debts and obligations of the partnership. Limited partners may not participate in the management of the limited partnership in most states.

limited partnership

A partnership formed by general partners (who run the business and have liability for all partnership debts) and limited partners (who partly or fully finance the business, take no part in running it, and have no liability for partnership debts beyond the money they put in or promise to put in).

limited partnership certificate

A document required for filing at the state level to form a limited partnership.