A partnership is a business that has not registered as a corporation or limited liability company and has more than one owner. In a partnership, the corporation does not pay taxes—the owners report profits as income on their own tax returns. A partnership is simple and inexpensive to create, and is the most common business type for businesses with multiple owners.
There are two partnership types—general partnerships and limited partnerships. General partnerships do not shield business owners from personal responsibility for the business's debts, while limited partnerships offer some owners protection from personal liability. If you are thinking about forming a partnership, an attorney experienced with partnership agreements will help you decide whether a partnership is a good idea for your business. The attorney can also determine which type of agreement would be best for you.