If you are interested in a partnership venture of any type, you might be considering a General Partnership, Joint Venture, Limited Partnership, or a Limited Liability Partnership.
A General Partnership takes place when two or more persons join forces to carry on as co-owners a business for profit.
Each state adopts its own model act to govern this entity structure. However, the original Uniform Partnership Act (UPA) was promulgated in 1916 and now most states have adopted revised versions which are sometimes referred to as a whole the “Revised Uniform Partnership Act” (RUPA).
A Joint Venture involves an association of two or more persons in a single business enterprise. Unlike with a General Partnership where the business relationship can be ongoing for years to come, with a Joint Venture, the association is centered on a specific goal which in some cases carries a specified narrower timeframe.
Due to the similarities between the joint ventures and the general partnerships, depending on the jurisdiction, these types of entities are governed by either the UPA or RUPA.
A limited Partnership is a partnership with at least one general partner and at least one limited partner. This structure differentiates from the general partnership due to the fact that its limited partners benefit from limited liability.
Most states recognize the “Revised Uniform Limited Partnership Act (RULPA) as the governing power for Limited Partnership.
A Limited Liability Partnership carries greater protection from liability than you’ll find in the general or limited partnership. With this type of entity structure depending on the jurisdiction, the limited liability is embraced by some or all partners.
Thanks for the 1996 RUPA amendment, the Limited Liability Partnership is now included under its umbrella of governing law.
In future articles, we’ll discuss in more depth each of the above business structures. However, for now, I’ll leave you with the mentioned basic definitions for you to think overnight.
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