My partner and I are starting a small business as a general partnership, but I'm confused as to we need/should have it "incorporated"?
A general partnership is not incorporated--it is just a simple entity between two or more parties, and you have full exposure (i.e. full liability). That means that each of you (and your respective assets) are exposed to contracts, leases, personal injuries and other potential liabilities.
If you and your partner in a general partnership enter into a lease, then each of you is individually liabile for rent payments, damages, etc. in full. You can then try to sue the other partner for contribution (i.e. their "half") but unless/until you can collect from them, you are exposed!
One option is to form a limited liability company (LLC), and have it sign the lease and all agreements, and have each of you fund the LLC on a 50/50 basis. This will also, if properly set up, shield your personal assets from exposure to possible liabilities for your "partnership's" acts/omissions (in this case, the LLC's acts/omissions). Setting that up does require that it be organized with the secretary of state in your home state.See question