A partnership is a joint business that is owned by at least two people. You can have more owners. A lot of times, starting a partnership is pretty easy. There are not a lot of legal things you have to go through. The most common thing you will do is draft articles of the partnership. The article of partnership is a contract between partners that explains how your profits are going to be shared (partnerships have the freedom to decide earnings/losses as they choose) and what an individual is going to do in the business.
They tend to be small businesses, such as retail, practitioners, services, etc.
So, what are the pros & cons? There are a few things to look at before deciding if you want to have a partnership:
– Similar to sole-proprietorship
– Easy to start
– No extra taxes
– More likely to receive loans from banks
– More expertise due to the number of people you are partnered with
– The attraction of other individuals
– You still have unlimited liability (you’re responsible for anything that happens as a partner)
– The company has a limited life
– Shared profits
– Shared control, decision making
– Responsible for other partners negligence