What is a partnership?
A partnership enables a group of people to contribute their time, talents and money towards the business. In return they share the responsibilities and profits. In the absence of a formal partnership agreement, the law will assume that each partner has an equal share. The responsibility of running the business is shared and the ability to raise finance for the business is enhanced. It should also be noted that all partners may be personally liable if the business incurs any debts. If you are entering into a partnership, it is a good idea to draw up a partnership agreement.
A. A partnership is a business owned by two or more people that havent filed papers to become a corporation or a limited liability company (LLC). You don’t have to complete any paperwork to create your partnership — the arrangement begins as soon as you start a business with another person. Although the law doesn’t require it, many partners work out the details of how they will manage their business in a written partnership agreement. If you don’t create a written agreement, the partnership laws of your state will govern your partnership. Partnerships are often favored over corporations for taxation purposes, as a partnership structure eliminates the dividend tax levied upon profits realized by the owners of a corporation. The most basic form of partnership is a general partnership, in which all partners manage the business and are personally liable for its debts. Two other forms which have developed in most countries are the limited partnership (LP), in which certain “limited partner
