form of business organization created by an agreement between two or more persons who contribute capital and/or their services to the organization. Advantages are: (1) it is easily established with minimal organizational effort and costs; and (2) it is free from special government regulation. Disadvantages are: (1) it carries unlimited liability for the individual partners (firms organized as co-partnerships do not dissolve with the death or withdrawal of a partner); (2) it is dissolved upon the withdrawal or death of any of the partners; and (3) its ability to raise large amounts of capital is limited. general partner are those who are responsible for the day-to-day operations of the partnership and who are responsible for the partnership's total liabilities, while limited partner are those who contribute only money, who are not involved in management decisions, and whose liability is limited to their investment.
organization of two or more persons who pool some or all of their money, abilities, and skill in a business and divide profit or loss in predetermined proportions. partners are individually responsible for debts of the partnership. However, in a limited partnership, limited partners generally assume no monetary responsibility beyond the capital originally contributed. Death of a general partner will normally terminate the partnership.
contract between two or more people in a joint business who agree to pool their funds and talent and share in the profits and losses of the enterprise. Those who are responsible for the dayto-day management of the partnership's activities, whose individual acts are binding on the other partners, and who are personally liable for the partnership's total liabilities are called general partners. Those who contribute only money and are not involved in management decisions are called limited partners; their liability is limited to their investment.
Limited partnerships are also sold to investors by brokerage firms, financial planners, and other registered representatives. These partnerships may be either public (meaning that a large number of investors will participate and the partnership's plans must be filed with the Securities and Exchange Commission) or private (meaning that only a limited number of investors may participate and the plan need not be filed with the SEC). Both public and private limited partnerships invest in real estate, oil and gas, research and development, and equipment leasing. Some of these partnerships are oriented towards offering tax advantages and capital gains to limited partners, while others are designed to provide mostly income and some capital gains.
an agreement between 2 or more entities to go into business or invest. Either partner may bind the other, within the scope of the partnership. Each partner is liable for all the partnership's debts. A partnership normally pays no taxes, but merely files an information return. The individual partners pay personal income tax on their share of income. Compare with corporation.
Example: Abel and Baker form a partnership to buy land. The partnership owns the property, rather than Abel and Baker.
