Partners are taxed as individuals and are personally liable for torts and contractual obligations.
One of the obvious disadvantage is that all general partners have unlimited liability. Each general partner is personally liable for all business debts.
The limited partners are basically "passive investors". They share in the profits of the business, but they do not participate actively in management and are not personally liable for debts of the business.
This means that, unlike a shareholder of a corporation, a partner can be personally liable for the debts of the partnership when the partnership's assets are insufficient to meet its obligation.
