What is a partnership?

Answer:
A partnership is an unincorporated business

entity characterized by a formal relationship between two or more individuals engaging business as co-owners. The individuals share in the profits and risks associated with the business.

Partnerships can be general or limited in nature. In a general partnership, the partners share in the management responsibilities for the business and are jointly and severally liable for its debts and obligations. In a limited partnership, the obligations of a partner who does not actively participate in managing the business are limited to the extent of his or her investment.

Partnerships are not recognized as separate legal entities, but rather are legally recognized as a group of individuals. Each partner pays taxes on his or her share of the profits via individual tax returns.