1. Chapter 8: Types of Business Organizations Section 2: Forms of Partnerships pg.232-237

2. A Partnership
A partnership is a business co-owned by two or more people, or “partners,” who agree on how responsibilities, profits, and losses will be divided.
Partnerships are found in all kinds of businesses, from construction companies to real estate groups.
However, they are especially widespread in the areas of professional & financial services—law firms, accounting firms, doctors’ offices, and investment companies.
There are several different types…

3. Type 1: General Partnerships
The most common type of partnership is the general partnership.
This is a partnership in which partners share responsibility for managing the business and each one is liable for all business debts and losses.
As in a proprietorship, their liability could put personal savings at risk.
Partners share responsibility, liability, and profits equally, unless there is an agreement that specifies otherwise.
This type of partnership is found in almost all areas of business.

4. Type 2: Limited Partnerships
In a general partnership each partner is personally liable for the debts of the business.
There is a way to limit one’s liability, through a limited partnership.
This type of partnership is when at least one partner is not involved in the day-to-day running of business and is liable only for the funds he or she has invested.
All limited partnerships must have at least one general partner who runs the business and is liable for all debts, but there can be any number of limited partners.
Limited partners share in the profits.
This form of partnerships allows the general partner to raise funds to run the business.

5. Type 3: Limited Liability Partnerships (LLP)
This is a partnership in which all partners are limited partners and not responsible for the debts and other liabilities of other partners.
T/f, if one partner makes a mistake that ends up costing the business a lot of money, the other partners can’t be held liable
Not all businesses can register as LLPs.
Those that can include medical partnerships, law firms, and accounting firms.
These are businesses in which malpractice--negligent, or unprincipled behavior—can be an issue.
This is a new form of business organization, and the laws governing them vary from state to state.

6. Partnerships: Advantages-1
Easy to Open and Close: Partnerships, like sole proprietorships, are easy to start up and dissolve. As long as your bills are paid you may dissolve a partnership at any time.
Few Regulations: you can enter a partnership w/o a lot of regulations. Partners are covered under the Uniform Partnership Act (UPA), a law, adopted by most states that lays out basic partnership rules.

7. Partnerships: Advantages-2
Access to Resources: Partnerships generally make it easier to get bank loans for businesses purposes. A greater pool of funds makes it easier for partnerships to attract and keep workers.
Joint Decision Making: With more than one person making decisions this could result in better decisions. Limited partners don’t make decisions.
Specialization: Each partner should bring specific skills to the business. Having partners focus on their special skills promotes efficiency.

8. Partnerships: Disadvantages-1
Unlimited Liability: This is the biggest disadvantage, just like sole proprietorships, you can lose all of your savings and your property to cover your business debts.
Potential for Conflict: Having more than one decision maker can often lead to conflict, b/c all partners may need to approve.

9. Partnerships: Disadvantages-2
Limited Life: Like sole proprietorships, partnerships have limited life. When a partner dies, retires, or leaves for some reason, or if new partners are added, the business as it was originally formed ceases to exist legally. A new partnership arrangement must be established if the enterprise is to continue.