There are several different kinds of partnerships, including general partners, limited partners, and joint ventures. A general partner is an active partner and has unlimited personal liability for the debts of the partnership. One general partner can personally obligate the other general partners. A limited partner is an inactive partner who contributes only money to the partnership. States that have adopted the Uniform Limited Partnership Act require the filing of a certificate listing the limited partners.
Limited partners have limited liability and are liable only to the extent of their investments.
Limited partnerships are regarded as securities because the investors have no control over the enterprise. A joint venture is a partnership formed for a single undertaking rather than for a continuing business. Partnerships do not pay separate income tax, but must file a return. The tax is assessed directly against the partners even when profits are retained in the partnership for partnership activities. The heirs of a general partner have no rights to the partnership business but are entitled to the value of the deceased partner's share in partnership assets.