Partnership Law: Overview

Partnership Law: Overview

State laws govern how partnerships are strucutred and managed. There laws generally include:

  • Each partner's authority within the partnership;
  • How liable the partners are for the partnership's debts, obligations, and legal issues;
  • How new partners can be added, or how current partners can leave the partnership;
  • If ownership in the partnership can passed on to heirs or benefactors;
  • How the partnership can be named, and;
  • How the partnership will pay state and federal taxes.

Each state is different, however, so you should refer to the partnership law in your state for more details.

  • Overview of Businesses and Partnerships
    This section will explain various types of business organizations and help you decide if a partnership is the right form for your business. Types of Business Organizations A partnership is only one type of business organization. There are basically five types of business organizations:
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  • Personal Liability
    To fully understand partnerships, as well as all other types of business entities, it is important to understand the legal concept of personal liability for business obligations. There are always financial risks associated with starting a business. One risk is that the business will fail to make...
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  • General Partnerships
    General partnerships are the most basic type of partnership, and are little more than an agreement between two or more people to run a business. General partnerships have fallen out of favor, being replaced by other types of business structures because they don’t offer liability protection for...
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  • Limited Partnerships
    A limited partnership (LP) is where two or more people own a business, but there are two classes of partners: general partners (who own and operate the business), and limited partners (who invest their money or property in the business, do not have the right to make decisions regarding the...
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  • Limited Liability Partnerships
    A limited liability partnership (LLP) is basically a general partnership, but with the addition of giving the partners at least some limited personal liability. There is only one class of partner (general partners).
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  • Limited Liability Limited Partnerships
    A limited liability limited partnership (LLLP) is a type of partnership that is very similar to a limited liability partnership (LP) in that it has two types of partners, general partners and limited partners. Unlike an LP, however, the general partners in an LLLP have some liability protection....
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