[2] In the event that a partnership is dissolved, general partners are subject to liquidation,[1] such that their share of the assets of the partnership may be distributed to claimants such as creditors before the partner receives any remaining share.
[5] The protection against liability enjoyed by limited partners comes at the cost of management power.
In order to have a partnership that is recognized, the people who are engaged must enter a formal contract.
89 of 1896, in which it describes general partnerships as an engagement between partners who decide to jointly run a business.
[9] Although no formal proceedings are necessary to enter a partnership agreement, general partners are taxed with a "pass-through" taxation.
[10] Unlike the rest of the United Kingdom, in Scotland general partnerships are considered separate legal personalities, meaning a general partnership entity is able to do things such as, own assets in its own name, borrow money and grant security of assets that are within its own name and, bring issues to court in its own name.
Limited partners do not have to pay self-employment taxes on profits that they receive from the partnership because they are not considered as active members of the company, while general partners pay self-employment taxes on their share of profits.