Before beginning a business partnership, it’s important to understand how they work. In North Carolina, for example, you can form four types of business partnerships: general partnerships, limited partnerships, limited liability partnerships, and limited liability limited partnerships. Each type has separate legal and tax consequences, so when establishing a business partnership, it’s crucial to work with a business lawyer. They will walk you through all of the legal implications, and help you through the process as a whole. Here are some questions North Carolina business attorneys are commonly asked about partnerships.   

FAQ Business Lawyers Receive About Partnerships

What is a general partnership?

A general partnership is a business that two or more people form. Each partner agrees to contribute labor, money, and skills to the enterprise. They also agree to share management, profits, and losses. Typically, partners have legal responsibility for the other partners’ actions as well as their own.

What is a limited partnership?

Two or more corporations, partnerships, or individuals may form a limited partnership (LP). These partnerships have limited partners, including investors, and general partners who manage and operate the business. General partners have unlimited liability for partnership activities and debts.

What is a limited liability partnership?

A limited liability partnership (LLP) shields the partners from personal liability for the acts and debts of the other partner, and there are only general partners in the enterprise. Each partner pays taxes on their share of income, regardless of when they receive it.

What is a limited liability limited partnership?

A limited liability limited partnership (LLLP) has general partners and limited partners. General partners have unlimited personal liability for the general obligations of the limited liability partnership, but only limited liability for another partner’s professional malpractice. Liability of limited partners is limited to their capital contributions. Similar to a corporation, general and limited partners are not liable for the obligations of the partnership.

Are you a business owner or entrepreneur thinking about entering into a business partnership? You can trust the business lawyers at The Law Office of W. Randall Holcomb PLLC to take care of your legal needs. Based in in Guilford County, NC, this firm’s business lawyers are dedicated to helping entrepreneurs navigate the complex maze of federal, state, and local laws. They offer personalized service and pay attention to every detail. Visit their website to learn more about their services, or call (336) 888-8760 to schedule a consultation with a business lawyer.