Business partnerships are a popular form of collaboration, where two or more individuals or entities combine their resources and expertise to pursue common goals. This arrangement can offer numerous advantages, from shared financial risk to enhanced innovation. However, partnerships also come with challenges that need to be carefully managed to ensure success. Understanding the intricacies of business partnerships can help entrepreneurs and companies make informed decisions that align with their long-term objectives.

Types of Business Partnerships

General Partnership (GP)

A General Partnership (GP) is the most straightforward form of business partnership, where all partners share equal responsibility in managing the business and are jointly liable for debts and obligations. This type of partnership does not require formal registration, although a partnership agreement is often recommended to clarify roles, responsibilities, and profit-sharing arrangements.

General partnerships are attractive due to their simplicity and ease of formation. However, since all partners share unlimited …