Chapter 4 Forms ofOrganization(3)

partnerships with local entrepreneurs[2]). In this case, the alliance may be structured in a process comparable to a Mergers & Acquisitions transaction.

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Politics (or geopolitics): In what is usually called an alliance, governments may partner to achieve their national interests, sometimes against allied governments holding contrary interests, as occurred duringWorld War II and the Cold War.

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Knowledge: In education, accrediting agencies increasingly evaluate schools, or universities, by the level and quality of their partnerships with local or international peers and a variety of other entities across societal sectors.

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Individual: Some partnerships occur at personal levels, such as when two or more individuals agree to domicile together, while other partnerships are not only personal, but private, known only to the involved parties.

Partnerships present the involved parties with complex negotiation and special challenges that must be navigated unto agreement. Overarching goals, levels of give-and-take, areas of responsibility, lines of authority and succession, how success is evaluated and distributed, and often a variety of other factors must all be negotiated. Once agreement is reached, the partnership is typically enforceable by civil law, especially if well documented. Partners who wish to make their agreement affirmatively explicit and enforceable typically draw up Articles of Partnership. Trust and pragmatism are also essential as it cannot

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be expected that everything can be written in the initial partnership agreement, therefore quality governance[3] and clear communication are critical success factors in the long run. It is common for information about formally partnered entities to be made public, such as through a press release, a newspaper ad, or public records laws.

While industrial partnerships stand to amplify mutual interests and accelerate success, some are collaboration may be considered ethically problematic. When a politician, for example, partners with a corporation to advance the latter's interest in exchange for some benefit, a conflict of interestresults;

consequentially, the public good may suffer. While technically legal in some jurisdictions, such practice is broadly viewed negatively or ascorruption. Governmentally recognized partnerships may enjoy special benefits in tax policies. Among developed countries, for example, business partnerships are often favored over corporations in taxation policy, since dividend taxes only occur on profits before they are distributed to the partners. However, depending on the partnership structure and the jurisdiction in which it operates, owners of a partnership may be exposed to greater personal liabilitythan they would as shareholders of a corporation. In such countries, partnerships are often regulated via anti-trust laws, so as to inhibit monopolistic practices and foster free market competition. Enforcement of the laws, however, varies

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considerably. Domestic partnerships recognized by governments typically enjoy tax benefits, as well.

2.3.3 Classification of partnership

General partnership Limited partnership

? Passive investors:they share in the profits of the business,but they do not participate actively in management and are not personally liable for debts of the business

Limited liability partnership (doctors, lawyers, accountants)

? General partnership

Under common law legal systems, the basic form of partnership is a general partnership, in which all partners manage the business and are personally liable for its debts.

? Limited partnership

Limited partnership (LP), in which certain limited partners relinquish their ability to manage the business in exchange for limited liability for the partnership's debts.

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limited partnership[edit] Main article: UK partnership law

A limited partnership in the United Kingdom consists of:

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One or more people called general partners, who are liable for all debts and obligations of the firm; and

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One or of the firm beyond the amount contributed.

Limited partners may not:

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Draw out or receive back any part of their contributions to the partnership during its lifetime; or

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Take part in the management of the business or have power to bind the firm.

If they do, they become liable for all the debts and obligations of the firm up to the amount drawn out or received back or incurred while taking part in the management, as the case may be.

? Limited liability partnership

Limited liability partnership(LLP), in which all partners have some degree of limited liability.

There are two types of partners. ? General partners

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General partners have an obligation of strict liability to third parties injured by the Partnership. General partners may have joint liability or joint and several liability depending upon circumstances. ? Limited partners

The liability of limited partners is limited to their investment in the partnership. ? Silent partner

A silent partner is one who still shares in the profits and losses of the business, but who is not involved in its management, and/or whose association with the business is not publicly known; these partners usually provide capital in the expectation of a return on their investment.

Partnerships[edit] ?

General Partnership: is a partnership in which all the partners are jointly and separately liable for the debts of the partnership. In most U.S. states, it can be created by agreement without requiring a public filing. The partners may themselves be legal entities or individuals.

General partner

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