What are the different types of business partnerships?
The three different types of business partnerships are general partnerships, joint ventures, and limited partnerships. A general partnership is the most basic and is an agreement between two or more individuals in which profits and liability are shared among the partners. In a general partnership, each partner has unlimited liability and is subject to seizure of their personal assets in certain circumstances. These partnerships require little paperwork and are easier to set up than corporations or LLCs.
A joint venture is formed when two entities pool their resources and join to form a new entity which may be structured as a partnership, LLC, or corporation. Joint ventures are typically formed to allow two companies to use their different areas of expertise to capitalize on an opportunity.
Lastly, in a limited partnership, the general partner has unlimited liability and is involved in managing most of the business, and the limited partners play a smaller role and typically provide an initial investment. Limited partners are only held liable to their initial investment.
If you are in a dispute within your partnership agreement, contact Knight Law to discuss your case.