Limited partnerships have in large measure been replaced by limited liability companies as the passive investment vehicles of choice. But, they are still relevant because they are still sometimes used and there are many legacy limited partnerships that are still in existence.
On the surface, it appears limited partners have very few rights and protections. They are not allowed to participate in management or to second guess the general partner’s actions. However, while the law requires that they stay passive insofar as management is concerned, it does afford them a number of protections to assure that their financial interests are not abused.
"A limited partner is not in the hopeless position where he must only suffer in silence when an alleged wrong occurs. He has a right of full and free access to information contained in the partnership books, and of all things affecting the partnership, as well as a right to formal accounting." Millard v Newmark & Co., 24 AD2d 333, 336 (lst Dep' t, 1966).