What is it?
A partnership is a business ran by two or more people. These people are business “partners”. They agree to divide profits and losses of their business. Each person contribute by taking their responsibility of the work they divided.
There are 3 types of partnerships.
There are 3 types of partnerships.
- General Partnerships
- Limited Partnerships
- Limited Liability Partnerships
General Partnerships
In this type of partnership, partners share responsibility, liability, and profits equally. That also means that all partners are liable for their co-owned company’s losses and debts. It is the most common type of partnership that can be found in almost all markets.
In this type of partnership, partners share responsibility, liability, and profits equally. That also means that all partners are liable for their co-owned company’s losses and debts. It is the most common type of partnership that can be found in almost all markets.
Limited Partnerships
Limited partnerships are formed by the agreement of at least one general partner and any number of limited partner. The general partner runs the business and is liable for all debts of their company. Limited partners are liable only for the funds they invested into the company.
Limited partnerships are formed by the agreement of at least one general partner and any number of limited partner. The general partner runs the business and is liable for all debts of their company. Limited partners are liable only for the funds they invested into the company.
Limited Liability Partnerships
Limited Liability Partnership is a partnership in which all partners are limited partners and there is no general partner. In this type of partnership, each person is not responsible for the debts caused by the mistake of their partner. Therefore, their personal savings are not at risk unless they make the mistake. LLP is not a very common type of partnership since not all businesses can register as LLP. Medical partnerships, law firms, and accounting firms are examples of LLP.
Limited Liability Partnership is a partnership in which all partners are limited partners and there is no general partner. In this type of partnership, each person is not responsible for the debts caused by the mistake of their partner. Therefore, their personal savings are not at risk unless they make the mistake. LLP is not a very common type of partnership since not all businesses can register as LLP. Medical partnerships, law firms, and accounting firms are examples of LLP.