Differences between General Partnership Business and Limited Partnership Business
The partnership business which has unlimited liabilities and involves two or more owners carrying out a business is called general partnership business. The partnership business which only one person’s liability is limited to a group of partners is called limited Partnership. Below briefly describe between General Partnership Business and Limited Partnership Business.
General Partnership Business
- Definition: The partnership business which has unlimited liabilities and involves two or more owners carrying out a business is called general partnership business.
- Name: the Limited word is absent at the end of the business name.
- Nature of partner: All the partners carry the unlimited liability of general partnership business.
- Handling of business: All the partners participate in handling the general business.
- Dissolution: Any partner can dissolute the general partnership business or can be dissolute due to insanity and bankruptcy of partners.
- Loan taking: Ordinary partners take a loan from this type partnership business.
- Registration: According to the Partnership Act-1932, it is not compulsory to be registered.
- Contact to the third party: They can sign any contract to the third party individually or jointly.
- Decision making: General partners can take any type of decision regarding the business.
Limited Partnership Business
- Definition: The partnership business which only one person’s liability is limited to the group of partners is called limited Partnership.
- Name: Limited word is needed to refer at the end of the business name.
- Nature of partner: This business has two categories partners like one partner’s liability is limited and another one partner’s liability is unlimited.
- Handling of business: All the partners do not participate in handling the limited business.
- Dissolution: Any limited partner can’t dissolute this business willingly. And the form is not terminated due to insanity and bankruptcy of partners.
- Loan taking: But in the limited partnership partners are failed to get a loan.
- Registration: The registration is compulsory here.
- Contact to the third party: The limited partners can’t sign a contract to the third party.
- Decision making: The limited partners can’t participate in the decision making of new partner acceptance and dissolution of any oldest partner.
