A partnership in business is a certain type of legal agreement that is made between 2 or more persons for the purpose of handling a business. Each person in this kind of a legal relationship will be a co-owner of the specified business. Co-owners invest in the business and will be liable to lawsuits and debts if any. But there is more than one type of partnership that can make up a business.
Read on to know the different kinds of partnerships and then decide which one would suit your company best
General Partnership: This kind of partnership involves individuals who assume equal rights in the management and day-to-day operations of the business. These individuals will have the liability as co-owners for lawsuits and debts. There are many pros in such an agreement; the most important one being individual tax returns at a much lower rate.
Limited Partnership - In a Limited Business Partnership, the individuals involved in the partnership benefit from the profits but the losses they share is directly proportional to their investment in the business. And of course, there has to be at least one general partner/owner of the business.
Limited Liability Partnerships - A Limited Liability Partnership is one where the involved partner gets protection from personal liability due to the negligence of the other. They are shielded from the wrongful acts or losses that the business suffers because of the