1. Limited Liability Partnership
Partnerships
In this lesson, students will be able to identify characteristics of partnerships.
Students will be able to identify and/or define the following terms:
Partnership
General Partnership
Limited Partnership
Limited Liability Partnership

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Unlike a sole proprietorship, a partnership
is a business owned and operated by two
or more people.

3. General Partnership
The most common type of partnership is a general partnership.
In a general partnership, all partners share equally in responsibility and liability.

4. If you form a general partnership,
your partner’s actions directly affect
you.

6. Limited Partnership
Another type of partnership is a limited partnership.
In a limited partnership, one partner must be a general partner or responsible and liable for the business.
The other partners are limited partners.

7. The limited partner only contributes money and has limited liability.

8. Limited Liability Partnership
Only some individuals are allowed to form such partnerships.
Doctors, lawyers, and accountants are allowed to form limited liability partnerships.
In these partnerships, liability is limited.

9. In limited liability partnerships (LLPs),
each partner is a limited partner and
only responsible for his own actions.

11. Liability
It is important to remember that liability is the legal obligation to pay all debts.
In the three different forms of partnerships, liability differs.
The varying degrees of liability determine the various types of partnerships.

12. General partners share equally in responsibility and liability.

13. In a limited partnership, one partner
must be fully liable and responsible.

14. The limited partner only contributes money and has limited liability.

15. In limited liability partnerships, all
partners have limited liability in
some situations.

16. EXIT QUIZ List the three types of partnerships.
Who is liable and responsible in a general partnership?
How do limited partnerships function?
Why would a partner chose to be a limited partner?
Who is allowed to form a limited liability partnership? Why?