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A partnership is a business structure where two or more individuals or entities collaborate to operate a business for profit. Partners share ownership, management responsibilities, and profits or losses according to an agreement. There are different types of partnerships, including general partnerships, limited partnerships, and limited liability partnerships, each with varying levels of liability and management roles. Partnerships are often used for professional firms like law, accounting, or consulting businesses.
A law firm operates as a partnership, with each partner sharing in the firm’s profits and being involved in strategic decisions, while also sharing liability for the firm’s obligations.
• A business structure where two or more individuals/entities share ownership and profits.
• Includes general, limited, and limited liability partnerships with varying roles.
• Commonly used for professional firms like law or accounting practices.
In a general partnership, all partners share equal liability, while limited partnerships have both general partners (with full liability) and limited partners (with restricted liability).
Partnerships allow for shared expertise, resources, and financial contributions, often leading to more robust decision-making and business growth.
It clearly defines each partner’s roles, responsibilities, and profit-sharing arrangements, helping prevent disputes and ensuring smooth operations.
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