[Please note that this is a general summary of our Partnership and Limited Partnership Agreements and other related documents and does not constitute legal advice. As each jurisdiction may be different, you may want to speak to your local lawyer.]

SUMMARY OF PARTNERSHIP, LIMITED PARTNERSHIP AND LLP TEMPLATES:

Members are often confused on the difference on General Partnership, Limited Partnership and Limited Liability Partnership. The following table is a quick reference guide:

Limited Liability Partnership	Limited Partnership	General Partnership
Separate legal entity ✔ - Certain jurisdiction may not have LLP, please check with your local lawyers	Not a separate legal entity X - Certain jurisdiction may not have Limited Partnership, please check with your local lawyers	Not a separate legal entity X
Limited liability for members ✔	Limited liability only for limited partners ✔, unlimited liability for general partners X	Unlimited liability for partners X
Incorporated by registration at Companies House ✔	Register of limited partnership at Companies House ✔	Few formalities. Can be created orally or by practice.
Can be formed by two or more persons. No maximum	Can be formed by two or more persons. No maximum (in some jurisdictions may be a 20 partner limit)	Can be formed by two or more persons. No maximum (in some jurisdictions may be a 20 partner limit)
Generally tax transparent unless in formal liquidation ✔	Not tax transparent. Is a taxable entity X	Tax transparent ✔
No restriction on withdrawal of capital (subject to "clawback" provisions in insolvency)	No restriction on withdrawal of capital	No restriction on withdrawal of capital
A Limited Partnership Agreement where the liabilities of members are limited. This agreement is drafted for 2-5 parties and available in the following forms: Neutral, Full Indemnity or No Indemnity between the Shareholders.	Limited Partnership Agreement provides a basic Partnership framework only. This agreement is drafted for 2-5 parties and available in the following forms: Neutral, General Partner or Limited Partner.	Partnership Agreement establishing a general partnership under local law. It provides a basic Partnership framework only. This agreement is drafted for 2-5 parties and available in the following forms: Neutral, Full Indemnity or No Indemnity between the Shareholders.

1. LLP v Limited Partnership v General Partnership

General partnership – liability is unlimited and each JV party is liable for the whole of the liabilities of the venture (although JV parties can themselves be corporate entities). Any change to the identity of the partners will entail a new partnership arrangement which can be an expensive and time-consuming process. The advantage is that sensitive details of the venture can remain completely private between the JV parties.

Limited partnership – the general partner manages the JV and has unlimited liability. Limited partners have limited liability but must be passive and play no part in the day to day management of the company – otherwise the benefits of limited liability are lost. This is popular as investment vehicles (where the majority of participants are passive investors) but not suitable for commercial joint ventures as limited partners must not be involved in the management of the venture. The advantage is that sensitive details of the venture can remain completely private between the JV parties.

LLP - Limited liability for LLP members. Increasingly common vehicle for commercial ventures (no longer used solely for professional partnerships).

• When the members agree that the LLP is to be bound under a contract, they will bind the LLP, like directors of a company, and not one another, like partners. Unlike partnerships, there is no joint liability for contractual obligations or "joint and several" liability for wrongs. While members may incur liability to third parties dealing with the LLP for negligence, unlike partners and like directors, they shall only do so if they have assumed a personal duty of care and the third party has reasonably relied on that assumption.

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