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Simple English definitions for legal terms
special partnership
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A quick definition of special partnership:
A special partnership is when two or more people own and run a business together to make money. There are different types of partnerships, like a general partnership where everyone is equal, or a limited partnership where some people only invest money and don't manage the business. A partnership can also be formed for just one project or for a specific amount of time. If someone pretends to be part of a partnership, they can be held responsible for any debts the partnership owes.A more thorough explanation:
A special partnership is a type of partnership where two or more individuals jointly own and operate a business for profit. Under the Uniform Partnership Act, a partnership is presumed to exist if the individuals agree to share the business's profits or losses. There are different types of partnerships, including:
- Limited Partnership: A partnership composed of one or more individuals who control the business and are personally liable for the partnership's debts (called general partners), and one or more individuals who contribute capital and share profits but who cannot manage the business and are liable only for the amount of their contribution (called limited partners).
- General Partnership: A partnership in which all partners participate fully in running the business and share equally in profits and losses.
- Family Partnership: A business partnership in which the partners are related.
- Nontrading Partnership: A partnership that does not buy and sell but instead is a partnership of employment or occupation.
For example, a limited partnership may be formed by a group of investors who want to invest their money in a business without taking an active part in managing the business. The general partners would be responsible for managing the business and would be personally liable for the partnership's debts, while the limited partners would only be liable for the amount of their contribution.