Partnerships can generally be categorized into the following types:
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General Partnership (GP):
- All partners share equal responsibility for managing the business and are personally liable for any business debts or obligations.
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Limited Partnership (LP):
- This partnership includes both general partners and limited partners. General partners manage the business and are personally liable, while limited partners contribute capital and have liability limited to their investment.
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Limited Liability Partnership (LLP):
- Partners in an LLP have limited liability, meaning they aren't personally responsible for the debts or actions of the other partners. It is commonly used by professional services firms like law or accounting practices.
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Limited Liability Limited Partnership (LLLP):
- This is a hybrid structure where both general and limited partners have limited liability. It’s an extension of the LP but adds limited liability protection to general partners.
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Joint Venture (JV):
- A temporary partnership formed by two or more businesses for a specific project or purpose. Once the project is complete, the joint venture is dissolved