Partnership

A partnership is a business with several individuals, each of whom owns part of the business. The relationship between the partners and the duties of partners are clarified in the partnership agreement.

In any partnership, each partner must “buy in” or invest in the partnership. Usually, each partner’s share of the partnerships profits and losses is based on his or her percentage share of ownership.

 

General Partnership

A general partnership is a partnership with only general partner. Each general partner takes part in the management of the business and also takes responsibility for the liabilities of the business. If one partner is sued, all partners are held liable. General partnerships are the least desirable for this reason.

 

 

 

Limited Partnership

A limited partnership includes both general partners and limited partners. A limited partner does not participate in the day-to-day management of the partnership and his/her liability is limited.
In many cases, the limited partners are merely investors who do not wish to participate in the partnership other than to provide an investment and to receive a share of the profits.
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