What is it ?
- It is a type of business organization , where the owners have unlimited personal liability for the actions of the business
- A partnership needs to maintain a separate partnership account , which can be either shared by partners or could be separate accounts for each partner
- It does not pay income taxes. Instead, the various partners report their share of the partnership’s profit on their their personal income tax returns.
A business would have a general partner along with other limited partners , in a limited liability partnership
Why become a partner ?
- To share the right to make business decisions net profits and losses.
- With a partner you will have someone to share ideas with and divide the day-to-day responsibilities, and ideally someone whose skills and interests complement yours, strengthening the company.
The partners together are referred to as the firm . Firm is not a separate entity ,as in a corporation and are hence liable for everything .
> This is better in the eyes of an investor , only compared to sole proprietorship , because now there are more proprietors .