General Partnership
Selecting a General Partnership for a new business venture requires and analysis of the pros and cons of the entity relative to your specific circumstance and needs, therefore, we have assembled a brief Q&A regarding the essentials related to the choice of a Partnership.
General Partnership FAQs
- What is a General Partnership?
- What are the differences between a General Partnership and a Sole Proprietorship?
- How are General Partnerships taxed?
- How many owners are required to form a General Partnership?
- Is a Limited Partnership required to have a registered agent?
What is a General Partnership?
A General Partnership is a business entity with two or more owners (“Partners”). The Partners share the profits and losses. Each Partner has the authority to bind the others to transactions and liabilities. Like the Sole Proprietorship, the profits and losses of the business are considered that of the Partners as owners. Each partner reports their percentage of profit or loss of the business activity on their personal tax returns to the IRS.
What are the differences between a General Partnership and a Sole Proprietorship?
Like the Sole Proprietorship, there is no protection of the one’s personal assets from the potential liabilities of the General Partnership. Each Partner is generally liable for the debts of the business. Limited Partners in a Limited Partnership have limited liability. Management is shared between the Partners is a General Partnership, u like a Limited Partnership, where the management is in one General Partner.
How are General Partnerships taxed?
The General Partnership is taxed as a partnership. Each partner reports his or her share of profit or loss on his or her individual tax return.
How many owners are required to form a Limited Partnership?
At least two owners.
Is a Limited Partnership required to have a registered agent?
Generally, no.