Limited or General Partnership?

[betterbiz]

I'm starting a new business with a friend, and need something in writing, however I'm confused. What kind of partnership agreement do I need, Limited or General?

[lawtalk]

betterbiz,

The General Partnership Agreement is easy to form and involves two or more people (not a husband and wife) jointly running the business and having a share in the profits as they are outlined in the agreement. The same applies to debts and liabilities. Every partner has an equal vote.

The general partnership itself is not subject to any income tax. One of the advantages to the general partnership is that no state filing, registration, or ongoing reporting is required.

The Limited Partnership Agreement is modeled around the General Partnership except it can have one or more “limited partners” (also known as “silent partners”) who are not liable for partnership debts. All liabilities rest with one or more designated general partners.

Limited partners own a share of the business but do not have any say in how the business is being run. In most states, limited partners are prohibited by law from getting involved in managerial decisions.

@LawTalk

[betterbiz]

Thanks LawTalk. Now I know I need the Limited Partnership agreement.

[lawtalk]

Originally Posted by betterbiz

Thanks LawTalk. Now I know I need the Limited Partnership agreement.

You're welcome, and good luck!