Partnership Business

Two or more than two persons have ownership on the organization. As in sole proprietorship, the organization and the partners are not legally different. The partnership is found to be concentrated in the business, such as finance, insurance, sale and purchase of land, house. This business is somewhat wider than sole proprietorship. The capital needed by the business is made available by different persons. Similarly, decision making can be divided among them. All partners need not play active role. Some partners may remain as sleeping partners only by making capital available. Most of the partnerships are established by making a written contract called 'articles of partnership.'

There are two types of partners- general partner and limited partner. In general or regular partnership, all partners have unlimited liability. It implies that in such a business, the creditors can claim on the personal property of the general partner. Each partnership requires at least one general partner. On the hand, a limited partner has limited liability. In case of loss in the business, the limited partner needs not take the responsibility of more than his investment. In general, the limited partner is restricted from being active in the management of the firm.