An investment fund is basically a group of people making investment together. There are several structures for funds. It could be a company. It also could be a limited partnership or a trust. Which structure should be used is mainly a tax consideration. If it is a company, the company will pay taxes. Profit and loss will remain in the company. The investor gets the dividends and capital gain from the company. Limited partnerships and trusts usually do not need to pay taxes themselves. All the profits and losses will be passed through to the investors. The investors pay taxes. Another factor to choose the structure of funds is liability. Companies and limited partnerships have limited liabilities. The liabilities of the investors are limited to the amount of investment in the funds. For publicly listed trusts, the liability is also limited. For non-publicly listed trusts, the liability is unlimited. Therefore, many private funds chose to use limited partnerships.