Differences between General and Limited Partnership Business

Differences between General and Limited Partnership Business

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.

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