There are basically two types of partnerships:

• General partnerships - a general partnership consists of general partners who share the management of the entity and are personally responsible for the partnership's obligations.
• Limited partnerships - a limited partnership consists of two classes of partners: general partners and limited partners. The general partners manage the limited partnership and are personally responsible for its obligations. The limited partners are similar to shareholders of a corporation. They cannot participate in the management of the entity, but can only determine who will manage the partnership. The limited partners share in the profits of the partnership, but their losses are limited to the amount of their capital contribution.