A general partnership is an unincorporated business with two or more owners who share business responsibilities. Each general partner has unlimited personal liability for the debts and obligations of the business. Each partner reports their share of business profits and losses on their personal tax return.
There are several types of business partnerships, but the most common is a general partnership. When two or more people agree to run a business together, without registering or incorporating the business, it is a general partnership. General partnerships are quite common among the different types of business entities because they are simple, both in terms of getting started and filing taxes.
If you’re going into business with partners, it’s important to understand how a general partnership compares to other types of partnerships and to other business structures.