What are the similaries and differences bewteen general and limited partnerships?

Answer 1

Dear D,

In a general partnership all partners can act on behalf of the partnership and all partners are personally liable for any and all debts and obligations. It is quick, easy and inexpensive to setup and operate, but there is no liability protection.

In a limited partnership, there is a general partner having all the liability, decision making authority and responsibility. There are also limited partners whose liability is limited to the amount of investment they have made. Limited partners have no management say of any kind and cannot get their money out before the disolution of the partnership. This more expensive to set up and but offers better liability protections and valuation discounts for tax purposes. Generally the general partner is an LLC or S-corp and not an individual, eliminating any personal liability.

Good Luck,
Dana B.