Types of Partnerships Business
There are many types of partnerships that can be applied in the business world. Usually, a partnership is a type of business where two or more people share the profits and losses of the business, according to the terms of a partnership agreement that they sign at the beginning of creating the business. Here we introduce you the main types of business partnerships:
A General Partnership
An association of two or more persons where the golden rule is equality between all the members of the partnership. Each partner has the same authority to act as an agent of the partnership and in case of debts and damages committed by other partners should assume the whole responsibility and take charge of debts from the business partnership.
A Limited Partnership
A limited partnership is formed for two or more persons divides on general and limited partners and allows each partner to restrict their personal liability to the amount of their business investment. The general partner has the active voice inside the business and assume the responsibility of all. Meanwhile the limited partner is like a silent partner that do not participate in the management decisions. All the partners of this limited partnership benefit from business profits.
This kind of partnership could be nice for a person that wants to invest in a business without assume the responsibility and charge of the business. For this reason the only responsibility for a limited partner is to invest money on the partnership.
Limited Liability Partnership
A limited liability partnership (LLP) is a fusion between a partnership and a corporation, where each partner is protected from the actions of the other partners and the profits from the partnership are equal for each one. Its usual see this type of partnership on many professionals, because it protects them from being involved in a malpractice lawsuit against another partner.
There are so many factors that you should take into account if you’re thinking on creating a business, and one of them is the type of partnership, our best advice if you’re on this point and want to learn more about the types of partnerships is to find a good business attorney, to choose the partnership that fix with your type of business.
At Bcombinator, we can provide you a team that specialises in business and much more, as the PACTVM team, a law firm that provides not only legal also financial services.
Murray, J. (2019, February 18). Types of Partnerships. Retrieved November 18, 2019, from https://www.entrepreneur.com/article/336695