Basics

Question 1

Define Partnership

Answer 1

An association of two or more persons who have agreed to co-own an ongoing business for profit

Question 2

Define General Partners

Answer 2

agents of the partnership, co-manage the business, share in profits and losses, and are generally exposed to personal liability for partnership debts and obligations

Question 3

Define Limited Partners

Answer 3

passive investors, not agents of the partnership, do not participate in management of the partnership, and are not generally personally liable for partnership debts and obligations

Question 4

Types of Partnerships

Answer 4

General Partnership
Limited partnership
Limited Liability Partnership

Question 5

Define General Partnership (GP)

Answer 5

Two or more general partners

Question 6

Define Limited Partnership (LP)

Answer 6

At least one general partner and one limited partner

Question 7

Define LLP

Answer 7

Protects general partners from personal liability

Question 8

Which types of partnership can become an LLP? And how?

Answer 8

GPs (NOT LPs)

A GP may convert by the vote of the partners holding a majority interest in the partnership and following LLP creation guidelines.