Types of Partnerships

The three main types of partnerships are general partnerships, limited partnerships and limited-liability partnerships. A general partnership may be formed expressly with a written agreement or, in some states, implicitly from the conduct of the parties. All partners in a general partnership are personally liable for acts of the other partners. A limited partnership has at least one general partner and at least one limited partner and usually must be registered with the state. The general partners have management authority but are personally liable for acts of the partnership, while limited partners have limited liability but no management authority. Limited-liability partnerships are the most popular of the partnerships because all partners have the right to manage the business directly.