All of net income belongs to the owner and can be withdrawn by owner.
Business pays no salary to the owner.
Debit Owner s Drawing account when cash is withdrawn. Unlimited personal liability owner is personally liable for all business debts. Charactieristics Ease of formation Limited Life partnership ends with the withdrawal or death of an existing partner. General Partnership Ease of formation Limited life Mutual agency each partner has the right to bind the partnership in contract Unlimited Liability each partner may be held personally liable for all the debts of the partnership Co-ownership of partnership property and profit Business pays no income taxes each partner pays personal income taxes on his share of partnership profits, regardless of the amount withdrawn from the business. General partners have the usual rights and obligations they manage the partnership and have unlimited liability for the debts of the business Limited Partners passive investors who do NOT participate actively in management of the business and are NOT personally liable for the debts of the business.