There are three different kinds of partnership that need to be addressed here, the first is a general or ordinary partnership. The second is a limited partnership and finally the limited liability partnership or LLP.
In a general partnership, all partners of the business share equal liability. This means they are responsible for their own actions, the actions of every other partner and also for any employees of the business, during regular working practises. In this instance, all debts incurred by the partnership are the responsibility of all the partners and can put at risk all personal assets of each partner in the business.
A limited partnership model can include general partners and limited partners; however, the limited partner would only be liable for the amount of capital they have invested into the business, plus any personal guarantees in raising finance.
Finally, a limited liability partnership (LLP) designates at least two of the partnership, upon which the law presses additional responsibilities. As in a limited partnership, the liability is restricted to the investment capital put in by each partner, and includes any personal guarantees of finance. Should for whatever reason the LLP be reduced to only one designated member then all other members will be considered by law as designated members.
In a general partnership, all partners of the business share equal liability. This means they are responsible for their own actions, the actions of every other partner and also for any employees of the business, during regular working practises. In this instance, all debts incurred by the partnership are the responsibility of all the partners and can put at risk all personal assets of each partner in the business.
A limited partnership model can include general partners and limited partners; however, the limited partner would only be liable for the amount of capital they have invested into the business, plus any personal guarantees in raising finance.
Finally, a limited liability partnership (LLP) designates at least two of the partnership, upon which the law presses additional responsibilities. As in a limited partnership, the liability is restricted to the investment capital put in by each partner, and includes any personal guarantees of finance. Should for whatever reason the LLP be reduced to only one designated member then all other members will be considered by law as designated members.
