Business Organizations FAQs
What is a Partnership?
A partnership is the relationship between two or more persons or entities who join together to carry on a trade or business. General partners are personally responsible for partnership liabilities.
What is a Limited Partnership?
A limited partnership has “limited partners” who are not personally responsible for partnership liabilities, who do not participate in management of the partnership business, and who are not authorized to incur liabilities on behalf of the partnership. A limited partner’s liability is limited to the partner’s financial investment in the partnership. A limited partnership also has a general partner who has full management responsibility and is personally responsible for partnership liabilities.
What is an LLC or a Limited Liability Company?
An LLC or Limited Liability Company is a company with the limited liability characteristics of a corporation. An LLC member’s liability is limited to the member’s financial investment in the LLC. An LLC does not have a general partner who is personally responsible fo the LLC liabilities.
What is a Corporation?
A corporation is a legal entity with shareholders and directors who are not personally responsible for the corporation’s liabilities. A shareholder’s liability is limited to the shareholder’s investment in the corporation.
What is a Subchapter S Corporation?
“S” corporations are not taxed at the corporate level but have tax aspects, similar to a partnership, with the shareholders receiving a share of net income or loss of the corporation.
What is a Nonprofit Entity?
A nonprofit entity can be an association or corporations formed for the purpose of serving a purpose of public or mutual benefit other than the pursuit or accumulation of profits.
