What are the four types of partnership?

Ownership and profits are usually split evenly among the partners, although they may establish different terms in the partnership agreement. In a general partnership, all partners have the power to bind the business to contracts and loans. Each partner also has a total liability, meaning they are personally responsible for all of the business debts.

Limited partnerships (LPs) are formal business entities authorized by the state. They have at least one general partner who is fully responsible for the business and one or more limited partners who provide money but do not actively manage the business.

A limited liability partnership (LLP) operates as a general partnership, with all partners actively managing the business, but it limits their liability for one another's actions. The partners still bear full responsibility for the debts and legal liabilities of the business, but they're not responsible for errors and omissions of their fellow partners.

A limited liability limited partnership (LLLP) is a newer type of partnership available in some states. It operates like an LP, with at least one general partner who manages the business, but the LLLP limits the general partner's liability, so all partners have liability protection.