What is a partnership?

A partnership is a legal arrangement between two or more individuals who come together to share the profits and losses of a business. This type of business ownership allows multiple people to contribute their skills, resources, and expertise to run a successful venture.

Types of partnerships

There are several types of partnerships, including:

1. General partnership: In this type of partnership, all partners share equal responsibilities and liabilities in managing the business.
2. Limited partnership: This partnership consists of both general partners (who manage the business) and limited partners (who invest in the business but have limited liability).
3. Limited liability partnership: In this type of partnership, all partners have limited liability, protecting their personal assets from business debts.

Partnership agreement

A partnership agreement is a legal document that outlines the terms and conditions of the partnership, including profit sharing, decision-making processes, and dispute resolution mechanisms. It is essential to have a partnership agreement in place to avoid conflicts and ensure a smooth operation of the business.

Joint venture

A joint venture is a type of partnership formed for a specific project or a limited period. Partners in a joint venture collaborate to achieve a common goal and share the risks and rewards of the venture.