commercial partnership

A partnership is a business structure where two or more individuals agree to share in the profits and losses of a venture. Each partner contributes labor, skills, money, or property to the business. This is one of the oldest forms of business organization and remains common for small to midsize businesses, particularly among professionals like lawyers and accountants.1

In a typical partnership, each general partner acts as an owner and agent for the business, with decisions binding all partners. Each partner is personally liable for the firm's debts. Partnerships are generally not separate legal entities, and income is taxed on the partners' personal returns.1

There are different types of partnerships, including general partnerships (GPs) where all partners share management and have unlimited liability, and limited partnerships (LPs) with at least one general partner and limited partners who contribute capital but have liability only up to their investment. Limited liability partnerships (LLPs) also exist, offering liability protection to all partners, typically for licensed professionals.1