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A partnership is an association of two or more persons that are co-owners of a business for profit.
A general partnership has the following characteristics:
Each partner is an agent of the partnership and can bind the partnership in its ordinary course of business;
Each partner is personally liable for the obligations of the partnership; and
The partnership may be dissolved by the express will of at least half of the partners even in contravention of a written agreement to the contrary.
A general partnership is generally not subject to federal income tax or California income or franchise tax.
A joint venture is an entity formed for a limited or temporary business purpose. Joint ventures have generally been treated as general partnerships under California law. LLCs may, however, become the entity of choice for many limited purpose business ventures.
A limited partnership is a partnership with one or more "limited partners" (partners designated in the agreement as limited partners who do not participate in the control of the business and who are not personally liable for the obligations of the partnership) and one or more "general partners" (partners who actively engage in the management and control of the business and who have unlimited personal liability for the obligations of the partnership).
Limited partnerships in California are governed by
The California Revised Limited Partnership Act (CRLPA) (Corp C §§15611-15724), and
Limited partnerships usually choose to be taxed as partnerships and therefore are generally not subject to federal or California income tax. However, unlike a general partnership, limited partnerships doing business in California, as well as limited partnerships that have filed a certificate of limited partnership with the Secretary of State and registered foreign limited partnerships, are subject to an annual tax of $800 for the privilege of doing business in California.
Limited Liability Partnership
California authorizes the formation of LLPs by attorneys, accountants, and architects, joining approximately 35 other states, including New York and Delaware. California is unique, however, in limiting the availability of LLPs to professionals for whom the limited partnership and LLC forms of entity are not available.
An LLP is a form of general partnership in which the liability of each partner may be limited to a greater extent than in standard partnerships.