Main Guide: Starting a Business.
There are two types of partnerships:
- general partnerships
- limited partnerships
General partnerships consist of two or more partners; these partners jointly manage the company's day-to-day operations and share responsibility for the company's debts and liabilities. Each partner contributes to the partnership - financially and in equity - and shares in the business' profits and losses.
Limited partnerships have both general partners and limited partners. General partners are responsible for the management of the LP and have unlimited liability. Limited partners are usually investors who do not have day-to-day responsibilities and have limited liability, meaning they cannot be liable for any amount greater than their original investment in the partnership.