Partnership

A Partnership is a business entity that is formed in most cases without filing or registering with any state. The Partnership is the default business entity when two or more individuals are in business together. They are pass through tax entities meaning that the partners themselves, and not the partnership, are taxed for the profits. However, Partnerships are frowned upon because they do not provide limited liability and each partner is on the hook for the debts and/or liabilities of the partnership. Though, there are limited liability options that have arisen for the partnership, the Limited Partnership (LP) and the Limited Liability Partnership (LLP), but they require filing and registration whereas the general Partnership is automatic.