Compare general, limited, and limited liability partnerships. Formulate reasons as to why a group of prospective partners might choose each.(4 points) sound human and make it short
General partnership: A general partnership is a business structure where two or more individuals run a business together and share equal responsibility for its profits, losses, and liabilities. Prospective partners might choose a general partnership because it is relatively easy and inexpensive to establish, offers flexibility in decision-making, and allows for shared management and resources.
Limited partnership: In a limited partnership, there are two types of partners - general partners and limited partners. General partners have unlimited liability and are actively involved in managing the business, while limited partners have limited liability and are primarily investors. Prospective partners might choose a limited partnership because limited partners have reduced personal liability for the business's debts, enhanced investment opportunities, and potential tax benefits.
Limited liability partnership (LLP): An LLP is a hybrid business structure that combines features of a partnership and a corporation. It offers limited liability protection to all partners, meaning they are not personally responsible for the LLP's debts or obligations. Prospective partners might choose an LLP because it grants personal asset protection, allows for flexible management structure, facilitates easy transfer of ownership, and provides liability protections against the actions of other partners.
Note: Each point is worth 1 point; total 4 points.
make it shorter
General partnership: Partners share profits, losses, and liabilities equally. Prospective partners choose it for easy setup, shared management, and flexibility.
Limited partnership: General partners manage actively, limited partners invest. Prospective partners choose it for reduced personal liability, investment opportunities, and possible tax benefits.
Limited liability partnership (LLP): All partners have limited liability. Prospective partners choose it for asset protection, flexible management, easy ownership transfer, and liability protection within the partnership.
make it one paragraph
A general partnership is chosen by prospective partners for its ease of setup, shared management, and flexibility in decision-making. In a limited partnership, prospective partners may choose to differentiate between general and limited partners to benefit from reduced personal liability, increased investment opportunities, and potential tax advantages. On the other hand, a limited liability partnership (LLP) offers all partners limited liability protection, making it an attractive option for prospective partners seeking personal asset protection, a flexible management structure, easy ownership transfer, and liability protection within the partnership.
General Partnership:
A general partnership is formed when two or more individuals come together to start a business. Each partner is equally responsible for the company’s debts and liabilities. Prospective partners might choose a general partnership if they want equal decision-making power, shared responsibilities and costs, and flexibility in managing the business.
Limited Partnership:
A limited partnership consists of general partners who manage the business and have unlimited liability, and limited partners who invest capital but have limited liability. Prospective partners might choose a limited partnership to secure investment capital from limited partners while maintaining control and management as general partners.
Limited Liability Partnership (LLP):
An LLP provides limited liability protection to all partners, meaning they are not personally responsible for the company's debts and liabilities. Prospective partners might choose an LLP if they want to protect their personal assets, separate their professional practice from personal liabilities, and still have the flexibility and management authority of a partnership.