· Limited A "limited partnership" is a partnership formed by two or more persons formed under the provisions of M.G.L. Chapter 109, s.8, having as members one or more general partners and one or more limited partners.
· General An arrangement by which partners conducting a business jointly have unlimited liability, which means their personal assets are liable to the partnership's obligations. Since all partners have unlimited liability, even innocent partners can be held responsible when another partner commits inappropriate or illegal actions. This fact alone demonstrates how an investor should heed caution when deciding on whether to become a general partner.
· Limited Liability (LLP) A limited liability partnership has elements of partnerships and corporations. It is a partnership in which some or all partners (depending on the country) have limited liability. In an LLP one partner is not responsible or liable for another partner's misconduct or negligence. This is an important difference from that of a limited partnership. In an LLP, some partners have a form of limited liability similar to that of the shareholders of a corporation. In some countries, an LLP must also have at least one "general partner" with unlimited liability. Unlike corporate shareholders, the partners have the right to manage the business directly. As opposed to that, corporate shareholders have to elect a board of directors under the laws of various state charters. The board organizes itself (also under the laws of the various state charters) and hires corporate officers who then have as "corporate" individuals the legal responsibility to manage the corporation in the corporation's best interest. An LLP also contains a different level of tax liability than a corporation.