What is a General Partnership
What is a General Partnership?

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What is a General Partnership?

A General Partnership, or simply a Partnership, is a business entity of two or more persons formed by agreement among the Partners. A General Partnership is viewed as being one and the same as its owners.  A General Partnership does not include the legal liability protections of a Corporation which means that the assets of all Partners can be taken in a lawsuit or be targeted to settle debts should the Partnership become insolvent. On the other hand a General Partnership offers freedom from the bureaucracy associated with Corporations.

There is little formality involved in creating a General Partnership. There is no need to file papers with the state. In fact, if someone can establish that you are in business with somebody else, then there is a General Partnership. The intention or lack thereof of having a formal Partnership is not important.

Each Partner is involved in the day-to-day operations of the business. All Partners are personally liable for any legal actions and debts of the General Partnership. All General Partners are responsible for legal actions and debt undertaken by any other Partner in normal business proceedings. Any Partner can bind the entire business to a contract or business deal.

A Partnership Agreement may specify how profits (and losses) are distributed and what will happen upon the death of a General Partner.

Unless specified in a Partnership Agreement, by default profits (and losses) are shared equally among the Partners; and a general Partnership will terminate upon the death of a general Partner.

A General Partnership has only one level of taxation. A Partnership is a tax-reporting entity, not a tax-paying entity. Profits pass through to the owners and are divided in accordance with the Partnership Agreement. There are no restrictions on how profits are allocated among Partners. Profits may be allocated according to which Partners have the best tax rates.

A General Partnership is in contrast to a Limited Partnership, which has both General Partners and Limited Partners within its Partnership structure.
CORPORATE GLOSSARY
 
Administrative Dissolution
Agent for Service of Process
Apostille
Apportionment
Articles of Incorporation
Articles of Organization
Assumed Name
At Will LLC
Authorized Shares
B Corporation
Benefit Corporation
Board of Directors
Business Dissolution
Business Entity
Bylaws
Certificate of Existence
Certificate of Status
Certified Copy
Close Corporation
Common Stock
Conversion
Corporate Bylaws
Corporate Name Reservation
Corporate Stock
DBA
Disregarded Entity
Dividends
ESOP
Excise Tax
Federal Tax ID
Ficticious Name
Foreign Qualification
Franchise Tax
General Partnership
Good Standing Certificate
Incorporator
Involuntary Dissolution
IRS Form 966
ITIN
Limited Liability Company
Limited Partnership
Liquidation
LLC
LP
Majority Shareholder
Meetings
Merger
Nexus
Non-Stock Corporation
Nonprofit Corporation
Obligated Member LLC
Organizer
Paid-in Capital
Paid-in Surplus
Par Value
Personal Service Corporation
Preferred Stock
Privilege Tax
Professional Corporation
Professional Service
Proxy
Registered Agent
Registered Office
Reporting Requirements
Revocation
S Corporation
Series LLC
Service Mark
Shareholder
Sole Proprietor
Stated Capital
Statutory Agent
Stock Certificate
Term LLC
Trade Name
Trademark
Trust
Trustee
Winding Up
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