There are four types of partnership: General partnership, limited partnership, limited liability partnership, and public private partnership.
General Partnership
In a general partnership, partners share ownership, profits, management, and liability for debts.
Limited Partnership
A limited partnership has general partners who manage the business and limited partners who do not participate in running the business and have limited liability.
Limited Liability Partnership
A limited liability partnership protects all partners from personal liability for business debts.
Public Private Partnership
A public private partnership is a partnership between government and private companies to fund infrastructure projects.
The major disadvantage of a partnership is unlimited personal liability – each partner is fully responsible for all debts and obligations. Partnership profits must also be shared.
An LLC partnership limits liability while allowing partners to actively manage the business. LLC partnerships tend to be the most common partnership type due to their suitability for most businesses.
Summary of Partnership Types
- General partnership: No formal registration, shared liability, profits, and management.
- Limited partnership: Limited partners invest with limited liability but cannot manage. General partners manage with unlimited liability.
- Limited liability partnership: Liability is limited for all partners.
- Public private partnership: Partnership between government and private companies to fund infrastructure.