What Is Partnership?
A partnership is when two or more people get together to start a business or complete a work. In a partnership, the people who agree to work together are called partners, and they share earnings, responsibilities, and duties. Each partner contributes something, like money, skills, or effort, to the completion of the work or business, and they also share the losses of the business.
Types Of Partnership
- General Partnership (GP): All partners share the profits and losses equally. They are equally liable for money owed.
- Limited Partnership (LP): Some partners invest money but don’t manage the business. Their risk is limited to what they invest.
- Limited Liability Partnership (LLP): Partners are not personally responsible for business debts. Common in professional firms (like doctors, lawyers, etc).
- Partnership at Will: There is no end date or fixed time for the partnership and it continues until partners decide to stop.
- Joint Venture: A transient partnership for a particular undertaking. Ends while the task is finished.
Advantages of Partnership
- Easy to Start: Less paperwork and legal rules.
- More Money (Capital): More partners mean more investment.
- Shared Workload: Work and decisions are divided among partners.
- Better Ideas: Different partners come with different skills.
Key Takeaways
A partnership is where a group of people come together to start a business where they work collectively and divide income and duties. There are different types of partnerships, such as general partnership, limited partnership, partnership at will and limited liability partnership. Partnerships are easy to begin, require much less office work, and permit for shared work and choice-making. They additionally offer greater investment opportunities and tax benefits as compared to big corporations.
