A partnership is a business structure in which two or more people share ownership and control of a company. Partnerships can take many forms, but the most common types are general partnerships and limited partnerships.
In a general partnership, all partners have an equal say in the management and decision-making of the company and are jointly and individually liable for the company’s debts and obligations. General partners are also personally liable for the actions of their partners.
Limited partnerships, on the other hand, have two types of partners: general partners and limited partners. General partners have the same responsibilities and liabilities as in a general partnership, while limited partners have a more passive role and are only liable for the partnership’s debts and obligations to the extent of their investment.
Partners in a partnership share profits and losses according to the terms of the partnership agreement. The partnership agreement is a legal document that outlines the rights and responsibilities of the partners, the management of the business, and the distribution of profits and losses. Partnerships are easy to form and less regulated than corporations, but the partners are personally liable for the partnership’s debts and obligations which could be a risk if the business incurs large liabilities.
