Q: Should I set up a Limited Partnership or Corporation to buy a business with investors who will not be in its management?
this is too broad a question with not enough specifics. The legal, managerial, and tax implications of a limited parnership is quite different from that of a traditional corporation, and that's without even discussing some of the other possibilities, like a limited liability partnership, limited liability limited partnership, a limited liability corporation, an S Corporation election, and more.
Besides, you may have different interests than your investors/partners, and may want to choose a legal structure more suitable to your needs than theirs.
Talk to an attorney before creating the legal entity - a small fee now may make a big difference later down the line. Especially if you expect to bring more investors on board later (venture capital and/or IPO will require your corporate structure to be in perfect shape before you'll ever receive funds)
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