Partnership
It is an organization of two or more persons who pool some or all of their money, abilities, and skill in a business divide profit or loss in predetermined proportions. Partners are individually responsible for the debts of the partnership. However, in a limited partnership, limited partners generally assume no monetary responsibility beyond the capital initially contributed. The death of a general partner will typically terminate the partnership [Friedman, p.514].
A partnership is a formal arrangement by two or more parties to manage and operate a business and share its profits.
In a broad sense, a partnership can be any endeavor undertaken jointly by multiple parties. The parties may be governments, nonprofits, enterprises, businesses, or private individuals. The goals of a partnership also vary widely.
Within the narrow sense of a for-profit venture undertaken by two or more individuals, there are three main categories of partnership: general partnership, limited partnership, and limited liability partnership.
In a general partnership, all parties share legal and financial liability equally. The individuals are personally responsible for the debts the partnership takes on. Profits are also shared equally. The specifics of profit sharing will be laid out in writing in a partnership agreement.
Limited liability partnerships (LLPs) are typical for professionals such as accountants, lawyers, and architects. This arrangement limits partners' liability so that, for example, if one partner is sued for malpractice, the assets of other partners are not at risk.
Limited partnerships are a hybrid of general partnerships and limited liability partnerships. At least one partner must be a general partner, with entire personal liability for the partnership's debts. At least one other is a silent partner whose liability is limited to the amount invested. This silent partner generally does not participate in the management or day-to-day operation of the partnership [Investopedia].
Partnership: Definition, How It Works, Taxation, and Types. Investopedia. Retrieved from: https://www.investopedia.com/terms/p/partnership.asp