Partnerships

Partnerships

A partnership is defined as the relationship between 'persons carrying on a business in common with a view of profit'. The word ‘persons’ in this definition includes artificial as well as natural persons. This could be an individual, a body corporate or the trustee of a settlement.

There are a number of different types of partnership that may be formed under English law:

•
a general partnership, in which all partners are jointly liable for debts and obligations of the partnership
•
a limited partnership, which consists of:
1. ◦
  one or more general partners, who are liable for all debts and obligations of the partnership, and
2. ◦
  one or more limited partners, whose liability for the partnership's debts and obligations is limited to the amount they have invested
•
a limited liability partnership (LLP) which, unlike a general or limited partnership, is liable for its own debts—the liability of the members of an LLP is normally limited to the amount of their financial contribution

A general or a limited partnership is not a corporate entity; rather it is a relationship between its partners.

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