Partnership And General Partnership: Characteristics Of A Partnership Business

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Partnership
Characteristics
“A partnership is defined as an arrangement in which two or more individuals share the profits and liabilities of a business venture, where all partners might share liabilities and profits equally, or some partners may have limited liability” (partnership). The characteristic of the taxation in partnership business clear in finding its advantage and disadvantage to general partner business. In comparison to sole proprietor, a partnership business has an advantage that all of income, gains, losses, deductions, and credits shared to its owners are to be taxed on each partner’s individual returns and some of the partnership firm provides a protection for their member from the liability of the business. On the other
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So this business entity has weak protection to partners because any of the partners can act without the permission of the other partners. (Your Personal Liability in a Partnership)

Limited partnerships (LP)
This business entity includes two types of partners one limited partner has limited liability and he takes the whole risk of the business, so he is liable for any depts. while other general partners has unlimited liability for any business depts. and losses based on the agreement among partners. (What's the difference between limited liability partnership and general partnership?, 2016)

Limited Liability Company (LLC)
The members of this business entity are not personally liable for the company debts and losses as they have limited liability for business depts. and liabilities. As the business assets under LLC are separated from the owner’s personal assets. The creditors go after the corporate in case of any fraud or liabilities. (Limited Liability Company -
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There are many types of partnership firms and the main and oldest two are the general partnership and a limited partnership. Partners in general partnership (GP) are mainly responsible about the company’s management, decision making and representing the company .In terms of loses and liabilities partners are responsible for the firms loses and liabilities and it distributed fairly among the partners. Limited partnerships (LP) is the types of business which obtain both general and limited partnership, that’s mean one of the partners have distraction in the liability and the management decisions while the other should obtain the general partnership and be responsible to the liability, management and obligations of the company. In addition the other type is the limited liability partnerships (LLP) which gives the partners the right to protect their selves from the liabilities of the company that caused through mismanagement of other partners but they still will be liable of the general liabilities of the company. The other type of the partnership is the limited liability company (LLC) which looks like corporation in its characteristics and it’s the only business structure that give its members the flexibility to be taxed as partnerships or corporation if they are more than one , if the company have only one member it could not be taxed as partnership.

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