Compare general, limited, and limited liability partnerships

Answer 1

General Partnership:
- A general partnership is a type of business structure where two or more individuals or entities come together to form a business in which they share ownership, profits, losses, and management responsibilities equally.
- The partners in a general partnership have unlimited personal liability for the debts and obligations of the business, which means their personal assets can be used to satisfy business debts.
- This type of partnership does not offer limited liability protection to its partners.

Limited Partnership:
- A limited partnership is a type of business structure that consists of at least one general partner and one or more limited partners.
- The general partner(s) have unlimited personal liability for the debts and obligations of the business, similar to a general partnership.
- The limited partner(s) have limited liability, meaning their personal assets are not at risk for the business debts beyond their initial investment.
- Limited partners typically have no control over the management or daily operations of the business and their liability is limited to the amount they have invested.

Limited Liability Partnership (LLP):
- A limited liability partnership is a relatively newer form of business structure that provides the benefits of limited liability protection to its partners while allowing them to actively participate in the management and decision-making processes.
- The partners in an LLP have limited personal liability for the debts and obligations of the business, protecting their personal assets.
- LLPs are generally required to file additional paperwork and comply with specific regulations to maintain their LLP status.
- This type of partnership is typically favored by professional service providers such as lawyers, accountants, and architects.