Genreal Partnerships?
what is an example of one
Why are they formed??
Answers:
A general partnership is a business entity owned and often managed by more than one person. Each partner is liable for the debts of the partnership and each may participate in its profits.
They are formed by two or more individuals who want to pool there capital and/or knowledge in order to increase their chances of success in a business.
A limited partnership (as opposed to a general partnership) is a form of partnership similar to a general partnership, except that in addition to one or more general partners, there are one or more limited partners.
The general partners are, in all major respects, in the same legal position as partners in a conventional firm, i.e. they have management control, share the profits of the firm in accordance with their partnership agreement, and have joint and several liability for the debts of the partnership.
The limited partners have limited liability, i.e. they are only liable on debts incurred by the firm to the extent of their investment, and they have no management authority. The general partners pay the limited partners the equivalent of a dividend on their investment, which is usually defined in the partnership agreement.
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