Each individual has an equal say in managing the partnership's business activities. The profits are divided equally between the partners or according to the terms of their written partnership agreement. A partner cannot sell his or her interest in a general partnership, and a general partnership ends when one of the partners dies. Although the members must file a partnership tax return, the partnership itself does not pay taxes on that income. Each partner pays taxes on his or her individual share of the profits.
General partners have unlimited personal liability for debts incurred by their business.
A creditor of a partnership can seize an individual partner's personal and real property as well as any personal bank accounts to satisfy debts of the general partnership. A limited partnership is similar to a general partnership in many ways. The general partners have unlimited personal liability for debts, but the limited partners can be held personally liable for partnership debts only up to the amount of money that they have invested in the partnership. Therefore, a creditor of a limited partnership cannot sue a limited partner for more than the amount that the limited partner invested in the partnership. The general partners in a limited partnership are responsible for managing the partnership's business, while the limited partners have no authority.