Partnership is formed to conduct a business with two or more partners being fully involved in the operation of business for profit. The partners contribute money, property, or services to the partnership; in return, they receive a share of the profits. The two most common partnership types are general and limited partnership.

No written partnership agreement is necessary, though it’s a good idea to make one. A partnership can arise even though there is no express agreement and the parties do not call themselves partners. Without question, a carefully prepared written agreement spelling out the rights and duties of the partners is highly recommended. A partnership agreement could be helpful in solving any disputes. There are some more advantages and disadvantages to the partnership.

Advantages of partnership:

  • They’re easy to form
  • More sources of capital
  • Liability may be spread among the partners
  • Sharing emotional burden

Disadvantages of partnership:

  • Friction between partners
  • Lack of continuity

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