A partnership is a business entity in which two or more persons (members) have united, on the basis of a partnership agreement to perform commercial activities utilizing a joint company name. The Commercial Law provides for two forms of partnership: general and limited partnerships. Both can be established by two or more persons. The main difference between the two forms is – all persons establishing a general partnership have unlimited liability for the partnership’s debts. On the other hand, limited partnerships are established by limited and unlimited partners, where the liability of limited partners is limited to the amount of capital contributed. Partnerships are established by partnership agreements and there are no requirements for minimum capital. Profit or looses of partnership are distributed at the end of the year in proportion to the amount of capital contributed by partners.
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