Limited Partnership (or, as it is sometimes called, special partnership), a partnership whereof one or more of the members contribute a certain amount to the capital, which may be lost by its being demanded for payment of the debts of the firm, but beyond which they have no further liability. This is utterly unknown to the common law, or to the law merchant as existing in England and the United States; but it has been common on the continent of Europe for a long time. Recently it has been adopted in this country, and is now common. After much opposition, it has also to some extent become established in England. The statutes of no two states, perhaps, are precisely the same; but they agree substantially in the following provisions: 1, there must be one or more general partners, all of whom are liable in solido; 2, there may be one or more special partners, and the specific sum contributed by each special partner must be actually paid in; 3, the arrangement or articles of partnership must be in writing, must generally be acknowledged before a magistrate, and must be published in one or more newspapers; 4, this advertisement, or publication, must state accurately the names and residence of the general partners, the names and residence of the special partners, the name of the firm, the sum which each special partner contributes, the business to be transacted, and the period for which the partnership is made or the time when it will terminate; and during that time the special partner cannot withdraw his capital.

In some of the states there are provisions limiting special partnerships to mercantile business, and excluding insurance, banking, etc. If any of the requirements of law are disregarded, the special partner becomes a general partner, and is liable in solido. The courts apply these rules with much severity. Thus, a special partner has been held liable in solido because, by an error of one of the newspapers, the sum he contributed was stated erroneously. (See Joint-Stock Company, and Limited Liability).