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A partnership is an arrangement where parties, known as
business partnerA business partner is a commercial entity with which another commercial entity has some form of alliance. This relationship may be a contract A contract is a legally binding document between at least two parties that defines and governs the right ...
s, agree to cooperate to advance their mutual interests. The partners in a partnership may be individuals,
businesses Business is the activity of making one's living or making money by producing or buying and selling products (such as goods and services). Simply put, it is "any activity or enterprise entered into for profit." Having a business name A trade ...
,
interest Interest, in finance and economics, is payment from a debtor, borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum (that is, the amount borrowed), at a particular rate. It is ...

interest
-based
organization An organization, or organisation (English in the Commonwealth of Nations, Commonwealth English; American and British English spelling differences#-ise, -ize (-isation, -ization), see spelling differences), is an legal entity, entity—such a ...

organization
s,
school A school is an educational institution designed to provide learning spaces and learning environments for the teaching of students under the direction of teachers. Most countries have systems of formal education, which is sometimes compulso ...

school
s,
government A government is the system or group of people governing an organized community, generally a State (polity), state. In the case of its broad associative definition, government normally consists of legislature, Executive (government), ex ...

government
s or combinations.
Organization An organization, or organisation (English in the Commonwealth of Nations, Commonwealth English; American and British English spelling differences#-ise, -ize (-isation, -ization), see spelling differences), is an legal entity, entity—such a ...

Organization
s may partner to increase the likelihood of each achieving their mission and to amplify their reach. A partnership may result in issuing and holding equity or may be only governed by a contract.


History

Partnerships A partnership is an arrangement where parties, known as business partnerA business partner is a commercial entity with which another commercial entity has some form of alliance. This relationship may be a contract A contract is a legally bin ...
have a long history; they were already in use in medieval times in Europe and in the Middle East. According to a 2006 article, the first partnership was implemented in 1383 by
Francesco di Marco Datini Francesco di Marco Datini (c. 1335 – 16 August 1410) was an Italian merchant born in Prato. Datini is notable for having implemented the first Partnership, partnership system in business in 1383. Biography Datini was one of four children of Marc ...
, a merchant of Prato and Florence. The Covoni company (1336-40) and the Del Buono-Bencivenni company (1336-40) have also been referred to as early partnerships, but they were not formal partnerships. In Europe, the partnerships contributed to the
Commercial Revolution The Commercial Revolution consisted of the creation of a European economy based on trade, which began in the 11th century and lasted until it was succeeded by the Industrial Revolution in the mid-18th century. Beginning with the Crusades, Europeans ...
which started in the 13th century. In the 15th century the cities of the
Hanseatic League The Hanseatic League (; gml, Hanse, , ; german: label=German language The German language (, ) is a West Germanic language mainly spoken in Central Europe. It is the most widely spoken and official or co-official language in Germany, Au ...
would mutually strengthen each other; a ship from Hamburg to Gdansk would not only carry its own cargo but was also commissioned to transport freight for other members of the league. This practice not only saved time and money, but also constituted a first step toward partnership. This capacity to join forces in reciprocal services became a distinctive feature, and a long lasting success factor, of the Hanseatic team spirit. A close examination of medieval trade in Europe shows that numerous significant credit based trades were not bearing interest. Hence, pragmatism and common sense called for a fair compensation for the risk of lending money, and a compensation for the opportunity cost of lending money without using it for other fruitful purposes. In order to circumvent the usury laws edicted by the Church, other forms of reward were created, in particular through the widespread form of partnership called
commendaThe commenda was a medieval contract A contract is a legally binding document between at least two parties that defines and governs the rights and duties of the parties to an agreement. A contract is legally enforceable because it meets the requ ...
, very popular with Italian merchant bankers. Florentine
merchant bank A merchant bank is historically a bank dealing in commercial loans and investment. In modern British usage it is the same as an investment bank. Merchant banks were the first modern banks and evolved from medieval merchants who traded in commodit ...
s were almost sure to make a positive return on their loans, but this would be before taking into account solvency risks. In the Middle East, the ''
QiradThe qirad (also known as Muqaradah by Hanafi and Hanbali scholars)Sapuan, Noraina Mazuin. "An evolution of Mudarabah contract: a viewpoint from classical and contemporary Islamic scholars." Procedia economics and finance 35, no. 3 (2016): 349-358. wa ...
'' and ''Mudarabas'' institutions developed when trade with the Levant, namely the Ottoman Empire and the Muslim Near East, flourished and when early trading companies,
contract A contract is a legally binding document between at least two parties that defines and governs the rights and duties of the parties to an agreement. A contract is legally enforceable because it meets the requirements and approval of the law. A ...
s,
bills of exchange A negotiable instrument is a document guaranteeing the payment of a specific amount of money, either on demand, or at a set time, whose payer is usually named on the document. More specifically, it is a document contemplated by or consisting of a c ...
and long-distance
international trade International trade is the exchange of capital, goods, and services across international borders or territories because there is a need or want of goods or services. In most countries, such trade represents a significant share of gross dom ...
were established.Jairus Banaji (2007), "Islam, the Mediterranean and the rise of capitalism", ''
Historical Materialism Historical materialism is a Historical method, methodology to understand human societies and their development throughout history, arguing that historical changes in social structure are ultimately driven by the struggles and conflicts unleashe ...
'' 15 (1): 47–74,
Brill Publishers Brill () (known as E. J. Brill, Koninklijke Brill, Brill Academic Publishers) is a Dutch international academic publisher founded in 1683 in Leiden Leiden (, ; in English language, English and Archaism, archaic Dutch language, Dutch al ...
.
After the fall of the Roman Empire, the Levant trade revived in the 10th to 11th centuries in Byzantine Italy. The eastern and western Mediterranean formed part of a single commercial civilization in the Middle Ages, and the two regions were economically interdependent through trade (in varying degrees). The Mongols adopted and developed the concepts of liability in relation to investments and loans in Mongol–ortoq partnerships, promoting trade and investment to facilitate the commercial integration of the Mongol Empire. The contractual features of a Mongol-''ortoq'' partnership closely resembled that of
qiradThe qirad (also known as Muqaradah by Hanafi and Hanbali scholars)Sapuan, Noraina Mazuin. "An evolution of Mudarabah contract: a viewpoint from classical and contemporary Islamic scholars." Procedia economics and finance 35, no. 3 (2016): 349-358. wa ...
and commenda arrangements, however, Mongol investors used metal coins, paper money, gold and silver ingots and tradable goods for partnership investments and primarily financed money-lending and trade activities. Moreover, Mongol elites formed trade partnerships with merchants from Central and Western Asia and Europe, including
Marco Polo Marco Polo (; ; ; September 15, 1254January 8, 1324) was a Republic of Venice, Venetian merchant, explorer, and writer who travelled through Asia along the Silk Road between 1271 and 1295. His travels are recorded in ''The Travels of Marco P ...

Marco Polo
’s family.


Partnership agreements

Although not required by law, partners may benefit from a partnership agreement that defines the important terms of the relationship between them. Partnership agreements can be formed in the following areas: * Business: two or more companies join forces in a joint venture, a buyer-supplier relationship, a
strategic allianceA strategic alliance (also see strategic partnership) is an agreement between two or more parties to pursue a set of agreed upon objectives needed while remaining independent organizations. The alliance is a cooperation or collaboration which aims ...
or a consortium to i) work on a project (e.g. industrial or research project) which would be too heavy or too risky for a single entity, ii) join forces to have a stronger position on the market, iii) comply with specific regulation (e.g. in some emerging countries, foreigners can only invest in the form of partnerships with local entrepreneurs. In this case, the alliance may be structured in a process comparable to a
Mergers & Acquisitions ''Mergers & Acquisitions'' is a real-time B2B community, featuring a monthly magazine, daily enewsletter, conferences and member gatherings that provide news, commentary, data, analysis and community around the burgeoning Middle-market company, mid ...
transaction. A large literature in business and management has paid attention to the formation and management of partnership agreements. It has, in particular, shown the role of contracts and relational mechanisms to organize business partnerships. * Politics (or geopolitics): In what is usually called an
alliance An alliance is a relationship among people A people is a plurality of person A person (plural people or persons) is a being that has certain capacities or attributes such as reason, morality, consciousness or self-consciousness, and b ...
, governments may partner to achieve their national interests, sometimes against allied governments holding contrary interests, as occurred during
World War II World War II or the Second World War, often abbreviated as WWII or WW2, was a World war, global war that lasted from 1939 to 1945. It involved World War II by country, the vast majority of the world's countries—including all the great ...
and the
Cold War The Cold War was a period of geopolitical tension between the United States and the Soviet Union and their respective allies, the Western Bloc and the Eastern Bloc, which began following World War II. Historians do not fully agree on its sta ...
. * Knowledge: In
education Education is the process of facilitating learning, or the acquisition of knowledge, skills, value (ethics), values, morals, beliefs, habits, and personal development. Educational methods include teaching, training, storytelling, discussion a ...
,
accrediting agencies Accreditation is a third-party attestation related to a conformity assessment body (such as certification body, inspection body or laboratory) conveying formal demonstration of its competence to carry out specific conformity assessment tasks (such a ...
increasingly evaluate schools, or universities, by the level and quality of their partnerships with local or international peers and a variety of other entities across societal sectors. * Individual: Some partnerships occur at personal levels, such as when two or more individuals agree to domicile together, while other partnerships are not only personal, but private, known only to the involved parties. Partnerships present the involved parties with complex negotiation and special challenges that must be navigated unto agreement. Overarching goals, levels of give-and-take, areas of responsibility, lines of authority and succession, how success is evaluated and distributed, and often a variety of other factors must all be negotiated. Once agreement is reached, the partnership is typically enforceable by
civil law Civil law may refer to: * Civil law (common law) Civil law is a major branch of the law.Glanville Williams. ''Learning the Law''. Eleventh Edition. Stevens. 1982. p. 2. In common law legal systems such as England and Wales and the law of the United ...
, especially if well documented. Partners who wish to make their agreement affirmatively explicit and enforceable typically draw up Articles of Partnership. Trust and pragmatism are also essential as it cannot be expected that everything can be written in the initial partnership agreement, therefore quality governance and clear communication are critical success factors in the long run. It is common for information about formally partnered entities to be made public, such as through a press release, a newspaper ad, or public records laws. While industrial partnerships stand to amplify mutual interests and accelerate success, some forms of collaboration may be considered ethically problematic. When a politician, for example, partners with a corporation to advance the latter's interest in exchange for some benefit, a
conflict of interest A conflict of interest (COI) is a situation in which a person or organization is involved in multiple wikt:interest#Noun, interests, finance, financial or otherwise, and serving one interest could involve working against another. Typically, thi ...
results; consequentially, the public good may suffer. While technically lawful in some jurisdictions, such practice is broadly viewed negatively or as
corruption Corruption is a form of dishonesty Dishonesty is to act without honesty. It is used to describe a lack of probity, cheating, lying, or deliberately withholding information, or being deliberately deceptive or a lack in integrity, knavishness, ...
.


Partner compensation

Partner compensation will often be defined by the terms of a partnership agreement. Partners who work for the partnership may receive compensation for their labor before any division of profits between partners.


Equity vs. salaried partners

In certain partnerships of individuals, particularly
law firm A law firm is a business entity formed by one or more lawyers A lawyer or attorney is a person who practices law, as an advocate, attorney at lawAttorney at law or attorney-at-law, usually abbreviated in everyday speech to attorney, is the ...
s and
accountancy Accounting or Accountancy is the measurement, processing, and communication of financial and non financial information about economic entity, economic entities such as businesses and corporations. Accounting, which has been called the "language ...
firms, equity partners are distinguished from salaried partners (or contract or income partners). The degree of control which each type of partner exerts over the partnership depends on the relevant partnership agreement. *An equity partner is a part-owner of the
business Business is the activity of making one's living or making money by producing or buying and selling products (such as goods and services). Simply put, it is "any activity or enterprise entered into for profit." Having a business name A trade ...
, and is entitled to a proportion of the distributable profits of the partnership. * A salaried partner who is paid a
salary A salary is a form of periodic payment from an employer to an employee, which may be specified in an employment contractAn employment contract or contract of employment is a kind of contract used in labour law to attribute rights and responsibili ...
but does not have any underlying ownership interest in the business and will not share in the distributions of the partnership (although it is quite common for salaried partners to receive a bonus based on the firm's profitability). Although individuals in both categories are described as partners, equity partners and salaried partners have little in common other than
joint and several liability Where two or more persons are liable in respect of the same liability, in most common law In law, common law (also known as judicial precedent or judge-made law, or case law) is the body of law created by judges and similar quasi-judicial tribunal ...
. In many legal systems, salaried partners are not technically "partners" at all in the eyes of the law. However, if their firm holds them out as partners, they are nonetheless subject to joint and several liability. In their most basic form, equity partners enjoy a fixed share of the partnership (usually, but not always an equal share with the other partners) and, upon distribution of profits, receive a portion of the partnership's profits proportionate to that share. In more sophisticated partnerships, different models exist for determining either ownership interest, profit distribution, or both. Two common alternate approaches to distribution of profit are "
lockstep In the United States, lockstep marching or simply lockstep is marching in a very close single file (formation), file in such a way that the leg of each person in the file moves in the same way and at the same time as the corresponding leg of the pe ...
" and " source of origination"
compensation Compensation may refer to: *Financial compensation *Compensation (chess), various advantages a player has in exchange for a disadvantage *Compensation (engineering) *Compensation (essay), ''Compensation'' (essay), by Ralph Waldo Emerson *Compensati ...

compensation
(sometimes referred to, more graphically, as "eat what you kill"). *Lockstep involves new partners joining the partnership with a certain number of "points". As time passes, they accrue additional points, until they reach a set maximum sometimes referred to as a plateau. The length of time it takes to reach the maximum is often used to describe the firm (so, for example, one could say that one firm has a "seven-year lockstep" and another has a "ten-year lockstep" depending on the length of time it takes to reach maximum equity). *Source of origination involves the compensation of profits according to a formula that takes into consideration the amount of revenue and profit generated by each partner, such that partners who generate more revenue receive a greater share of the partnership's distributed profit.


Law firms

Source of origination compensation is rarely seen outside of law firms. The principle is simply that each partner receives a share of the partnership profits up to a certain amount, with any additional profits being distributed to the partner who was responsible for the "origination" of the work that generated the profits. British law firms tend to use the lockstep principle, whereas American firms are more accustomed to source of origination. When British firm
Clifford Chance Clifford Chance LLP is a multinational law firmA law firm is a business entity formed by one or more lawyers to engage in the practice of law. The primary service rendered by a law firm is to advise consumer, clients (individuals or corporations ...

Clifford Chance
merged with American firm Rogers & Wells, many of the difficulties associated with that
merger In corporate finance, mergers and acquisitions (M&A) are transactions in which the ownership of Company, companies, other business organizations, or their operating units are transferred or Consolidation (business), consolidated with other entit ...
were blamed on the difficulties of merging a lockstep culture with a source of origination culture.


Taxation

Partnerships recognized by a government body may enjoy special benefits from taxation policy. Among developed countries, for example, business partnerships are often favored over
corporation A corporation is an organization—usually a group of people or a company—authorized by the State (polity), state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal ...
s in taxation policy, since
dividend tax A dividend tax is a tax imposed by a jurisdiction on dividend A dividend is a distribution of profit Profit may refer to: Business and law * Profit (accounting), the difference between the purchase price and the costs of bringing to market * ...
es only occur on profit before they are distributed to the partners. However, depending on the partnership structure and the
jurisdiction Jurisdiction (from Latin Latin (, or , ) is a classical language belonging to the Italic languages, Italic branch of the Indo-European languages. Latin was originally spoken in the area around Rome, known as Latium. Through the power of the ...
in which it operates, owners of a partnership may be exposed to greater
personal liability Personal may refer to: Aspects of persons' respective individualities * Privacy * Personality * Personal, personal advertisement, variety of classified advertisement used to find romance or friendship Companies * Personal, Inc., a Washington, D ...
than they would as
shareholder A shareholder (in the United States often referred to as stockholder) of a corporation A corporation is an organization—usually a group of people or a company—authorized by the State (polity), state to act as a single entity (a legal en ...
s of a corporation. In such countries, partnerships are often regulated via
antitrust Competition law is a law Law is a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole. A system, surrounded and influenced by its environment, is ...
laws, so as to inhibit and foster free market competition. Enforcement of the laws, however, varies considerably. Domestic partnerships recognized by governments typically enjoy tax benefits, as well.


Common law

At
common law In law, common law (also known as judicial precedent or judge-made law, or case law) is the body of law created by judges and similar quasi-judicial tribunals by virtue of being stated in written opinions. ''Black's Law Dictionary'' is the most-use ...
, members of a business partnership are personally liable for the debts and obligations of the partnership. Forms of partnership have evolved that may limit a partner's liability.


Forms of partnership

The general partnership, in which all partners manage the business and are personally liable for its debts, developed under
common law In law, common law (also known as judicial precedent or judge-made law, or case law) is the body of law created by judges and similar quasi-judicial tribunals by virtue of being stated in written opinions. ''Black's Law Dictionary'' is the most-use ...
. General partners have an obligation of
strict liability In criminal law, criminal and Civil law (common law), civil law, strict liability is a standard of Public liability, liability under which a person is legally responsible for the consequences flowing from an activity even in the absence of Tort, ...
to third parties injured by the Partnership. General partners may have joint liability or
joint and several liability Where two or more persons are liable in respect of the same liability, in most common law In law, common law (also known as judicial precedent or judge-made law, or case law) is the body of law created by judges and similar quasi-judicial tribunal ...
depending upon circumstances. The
limited partnership A limited partnership (LP) is a form of partnership A partnership is an arrangement where parties, known as business partners, agree to cooperate to advance their mutual interests. The partners in a partnership may be individuals, business ent ...
(LP), is a partnership in which general partners manage the partnership's operations, and limited partners forego the right to manage the business in exchange for
limited liability Limited liability is a legal status where a person's financial liability Liability may refer to: Law * Legal liability, in both civil and criminal law ** Public liability, part of the law of tort which focuses on civil wrongs ** Product liabi ...
for the partnership debts. The liability of limited partners is limited to their investment in the partnership. This form of partnership was developed in the 19th Century, the U.K. where it was imparted by charter, and in the U.S. where it was created by statute. More recently, additional forms of partnership have been recognized: *
limited liability partnership A limited liability partnership (LLP) is a partnership in which some or all partners (depending on the jurisdiction) have limited liabilities. It therefore can exhibit elements of partnerships and corporations. In an LLP, each partner is not r ...
(LLP): a form of partnership in which all partners may have some degree of limited liability. *
limited liability limited partnership The limited liability limited partnership (LLLP) is a relatively new modification of the limited partnership. The LLLP form of business entity In law, a legal person is any person A person (plural people or persons) is a being that has cert ...
(LLLP): a form of limited partnership in which general partners have limited liability for the debts and obligations of the limited partnership.


Silent partners

A ''silent partner'' or ''sleeping partner'' is one who still shares in the profits and losses of the business, but who is not involved in its management. Sometimes the silent partner's interest in the business will not be publicly known. A silent partner is often an investor in the partnership, who is entitled to a share of the partnership's profits. Silent partners may prefer to invest in limited partnerships in order to insulate their personal assets from the debts or liabilities of the partnership.


Oceania


Australia

Summarising s. 5 of the ''Partnership Act 1958'' (Vic), for a partnership in Australia to exist, four main criteria must be satisfied. They are: * Valid Agreement between the parties; * To carry on a business – this is defined in s. 3 as "any trade, occupation or profession"; * In Common – meaning there must be some mutuality of rights, interests and obligations; * View to Profit – thus charitable organizations cannot be partnerships (charities are typically incorporated associations under ''Associations Incorporations Act 1981'' (Vic)) Partners share profits and losses. A partnership is basically a settlement between two or more groups or firms in which profit and loss are equally divided


South Asia


Bangladesh

In Bangladesh, the relevant law for regulating partnership is the Partnership Act 1932. A partnership is defined as the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. The law does not require written partnership agreement between the partners to form a partnership. A partnership is not required to be registered, but a partnership is considered as a separate legal identity from its owners only if the partnership is registered. There must be a minimum of 2 partners and maximum of 20 partners.


India

According to section 4 of the Partnership Act of 1932,"Partnership is defined as the relation between two or more persons who have agreed to share the profits of a business carried on by all or any one of them acting for all". This definition superseded the previous definition given in section 239 of Indian Contract Act 1872 as – “Partnership is the relation which subsists between persons who have agreed to combine their property, labor, skill in some business, and to share the profits thereof between them”. The 1932 definition added the concept of mutual agency. The Indian Partnerships have the following common characteristics: 1) A partnership firm is not a legal entity apart from the partners constituting it. It has limited identity for the purpose of tax law as per section 4 of the Partnership Act of 1932. 2) Partnership is a concurrent subject. Contracts of partnerships are included in the Entry no.7 of List III of The Constitution of India (the list constitutes the subjects on which both the State government and Central (National) Government can legislate i.e. pass laws on). 3) Unlimited Liability. The major disadvantage of partnership is the unlimited liability of partners for the debts and liabilities of the firm. Any partner can bind the firm and the firm is liable for all liabilities incurred by any firm on behalf of the firm. If property of partnership firm is insufficient to meet liabilities, personal property of any partner can be attached to pay the debts of the firm. 4) Partners are Mutual Agents.The business of firm can be carried on by all or any of them acting for all. Any partner has authority to bind the firm. Act of any one partner is binding on all the partners. Thus, each partner is ‘agent’ of all the remaining partners. Hence, partners are ‘mutual agents’. Section 18 of the Partnership Act, 1932 says "Subject to the provisions of this Act, a partner is the agent of the firm for the purpose of the business of the firm" 5) Oral or Written Agreements. The Partnership Act, 1932 nowhere mentions that the Partnership Agreement is to be in written or oral format. Thus the general rule of the Contract Act applies that the contract can be 'oral' or 'written' as long as it satisfies the basic conditions of being a contract i.e. the agreement between partners is legally enforceable. A written agreement is advisable to establish existence of partnership and to prove rights and liabilities of each partner, as it is difficult to prove an oral agreement. 6) Number of Partners is minimum 2 and maximum 50 in any kind of business activities. Since partnership is ‘agreement’ there must be minimum two partners. The Partnership Act does not put any restrictions on maximum number of partners. However, section 464 of Companies Act 2013, and Rule 10 of Companies (Miscellaneous) Rules, 2014 prohibits partnership consisting of more than 50 for any businesses, unless it is registered as a company under
Companies Act, 2013 The Companies Act 2013 is an Act of the Parliament of India on Indian company law which regulates incorporation of a company, responsibilities of a company, directors, dissolution of a company. The 2013 Act is divided into 29 chapters containing 4 ...
or formed in pursuance of some other law. Some other law means companies and corporations formed via some other law passed by
Parliament of India The Parliament of India ( IAST: ) is the supreme legislative body of the Republic of India. It is a bicameral legislature composed of the President of India and the two houses: the Rajya Sabha (Council of States) and the Lok Sabha ...
. 7) Mutual agency is the real test. The real test of ‘partnership firm’ is ‘mutual agency’ set by the Courts of India, i.e. whether a partner can bind the firm by his act, i.e. whether he can act as agent of all other partners.


North America


Canada

Statutory regulation of partnerships in Canada fall under
provincial jurisdiction Canadian federalism () involves the current nature and historical development of the federal system in Canada. Canada is a federation with eleven components: the national Government of Canada and ten Provinces and territories of Canada, pro ...
. A partnership is not a separate legal entity and partnership income is taxed at the rate of the partner receiving the income. It can be deemed to exist regardless of the intention of the partners. Common elements considered by courts in determining the existence of a partnership are that two or more legal persons: *Are carrying on a business *In common *With a view to profit.


United States

Under U.S. law a partnership is a business association of two or more individuals, through which partners share the profits and responsibility for the liabilities of their venture. U.S. states recognize forms of limited partnership that may allow a partner who does not participate in the business venture to avoid liability for the partnership's debts and obligations. Partnerships typically pay less taxes than corporations in fields like fund management. The federal government of the United States does not have specific statutory law governing the establishment of partnerships. Instead, every U.S. state and the District of Columbia has its own statutes and common law that govern partnerships. The
National Conference of Commissioners on Uniform State Laws The Uniform Law Commission (ULC), also called the National Conference of Commissioners on Uniform State Laws, is a non-profit, American unincorporated association. Established in 1892, the ULC aims to provide U.S. states (plus the District of C ...
has issued non-binding model laws (called uniform act) in which to encourage the adoption of uniformity of partnership law into the states by their respective legislatures. Model laws include the Uniform Partnership Act and the
Uniform Limited Partnership Act::''(ULPA is also an acronym for ultra-low penetration air (ULPA) filters.)'' The Uniform Limited Partnership Act (ULPA), which includes its 1976 revision called the Revised Uniform Limited Partnership Act (RULPA), is a uniform act In the United ...
. Most U.S. states have adopted a form of the Uniform Partnership Act, which includes provisions regulating
general partnership A general partnership, the basic form of partnership under common law, is in most countries an association of persons or an unincorporated company with the following major features: *Must be created by agreement, proof of existence and estoppel. ...
s,
limited partnership A limited partnership (LP) is a form of partnership A partnership is an arrangement where parties, known as business partners, agree to cooperate to advance their mutual interests. The partners in a partnership may be individuals, business ent ...
s and
limited liability partnership A limited liability partnership (LLP) is a partnership in which some or all partners (depending on the jurisdiction) have limited liabilities. It therefore can exhibit elements of partnerships and corporations. In an LLP, each partner is not r ...
s. Although the federal government does not have specific statutory law for establishing partnerships, it has an extensive statutory and regulatory scheme for the taxation of partnerships, set forth in the
Internal Revenue Code The Internal Revenue Code (IRC), formally the Internal Revenue Code of 1986, is the domestic portion of federal statutory tax law in the United States, published in various volumes of the United States Statutes at Large United may refer to: Place ...

Internal Revenue Code
(IRC) and
Code of Federal Regulations The ''Code of Federal Regulations'' (''CFR'') is the codification of the general and permanent regulations published in the ''Federal Register The ''Federal Register'' (FR or sometimes Fed. Reg.) is the official journal A government gazette ...

Code of Federal Regulations
. The IRC defines federal tax obligations for partnership operations that effectively serve as federal regulation of some aspects of partnerships.


East Asia


Hong Kong

A partnership in Hong Kong is a business entity formed by the Hong Kong Partnerships Ordinance, which defines a partnership as "the relation between persons carrying on a business in common with a view of profit" and is not a joint stock company or an incorporated company. If the business entity registers with the Registrar of Companies it takes the form of a limited partnership defined in the Limited Partnerships Ordinance. However, if this business entity fails to register with the Registrar of Companies, then it becomes a general partnership as a default.


Europe


United Kingdom limited partnership

A limited partnership in the United Kingdom consists of: * One or more people called general partners, who are liable for all debts and obligations of the firm; and * One or of the firm beyond the amount contributed. Limited partners may not: * Draw out or receive back any part of their contributions to the partnership during its lifetime; or * Take part in the management of the business or have power to bind the firm. If they do, they become liable for all the debts and obligations of the firm up to the amount drawn out or received back or incurred while taking part in the management, as the case may be.


See also

*
Alliance An alliance is a relationship among people A people is a plurality of person A person (plural people or persons) is a being that has certain capacities or attributes such as reason, morality, consciousness or self-consciousness, and b ...

Alliance
*
Consortium A consortium (plural: consortia) is an Voluntary association, association of two or more individuals, companies, organizations or governments (or any combination of these entities) with the objective of participating in a common activity or pooli ...

Consortium
* Business partnering *
Corporation A corporation is an organization—usually a group of people or a company—authorized by the State (polity), state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal ...

Corporation
*
General partnership A general partnership, the basic form of partnership under common law, is in most countries an association of persons or an unincorporated company with the following major features: *Must be created by agreement, proof of existence and estoppel. ...
*
Joint venture A joint venture (JV) is a business entity created by two or more parties, generally characterized by shared ownership, shared returns and risks, and shared governance. Companies typically pursue joint ventures for one of four reasons: to access ...
*
Keiretsu A is a set of companies A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Natural person, natural, Legal personality, legal or a mixture of both, with a specific objective. Comp ...

Keiretsu
*
Limited liability partnership A limited liability partnership (LLP) is a partnership in which some or all partners (depending on the jurisdiction) have limited liabilities. It therefore can exhibit elements of partnerships and corporations. In an LLP, each partner is not r ...
(LLP) *
Limited partnership A limited partnership (LP) is a form of partnership A partnership is an arrangement where parties, known as business partners, agree to cooperate to advance their mutual interests. The partners in a partnership may be individuals, business ent ...
(LP) * Partnership accounting *
Partnership taxationPartnership taxation is the concept of taxing a Partnership, partnership business entity. Many jurisdictions regulate partnerships and the taxation thereof differently. Common law Many common law jurisdictions apply a concept called "flow through t ...
*
Strategic AllianceA strategic alliance (also see strategic partnership) is an agreement between two or more parties to pursue a set of agreed upon objectives needed while remaining independent organizations. The alliance is a cooperation or collaboration which aims ...
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Types of business entity A business entity is an entity that is formed and administered as per corporate law in order to engage in business activities, charitable work, or other activities allowable. Most often, business entities are formed to sell a product or a servi ...
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Up or out Up or out, also known as a tenure or partnership system, is the requirement for members of a hierarchical organization to achieve a certain rank within a certain period of time. If they fail to do so, they must leave the organization. Examples P ...
(aka partnership system)


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* {{Authority control Business law Types of business entity