Starting Partnerships
There are basically two types of partnerships:
- General
partnerships - a general partnership consists of general partners who
share the management of the entity and are personally responsible for the
partnership's obligations.
- Limited
partnerships - a limited partnership consists of two classes of
partners: general partners and limited partners. The general partners manage
the limited partnership and are personally responsible for its obligations.
The limited partners are similar to shareholders of a corporation. They
cannot participate in the management of the entity, but can only determine
who will manage the partnership. The limited partners share in the profits
of the partnership, but their losses are limited to the amount of their
capital contribution.