When two or more individuals decide to go into business together, one of the business forms they can choose is a partnership or a general partnership (GP). Partnerships are easy to create since there is no need to file a certificate with the state, are less expensive than other options and partners have joint liability and joint authority.
A general partnership requires a partnership agreement which generally includes partners’ rights and responsibilities, share of profits and, other details regarding ownership. A decision that also needs to be made when forming a partnership is if you will conduct business in the names of the partners or file to register and use a DBA (“doing business as”). The business name can be used to open a bank account and also to conduct business.
It is easy to create
It is easy to manage
Does not necessitate filing of formation documents or annual reports
The partnership itself does not pay income tax
An important disadvantage of general partnerships is that partners are personally liable for debts and also for the liabilities of other partners and might have a difficult time attracting investors.