General Partnership

Formation
When two or more people agree to be partners in a business venture you have a partnership.  It is recommended that you have a written agreement.  However, the lack of a writing will not keep you from being a partnership.  General Partnerships have been around for a very long time and there are a lot of laws that will tell you how questions in the partnership will be resolved if you lack a written agreement.

Administration
A partnership is generally easy to administer.  It is generally a little more difficult than a sole proprietorship because you have more people who have to agree on decisions with you.

Control
Partners share control and should decide how that control is to be allocated between them in a partnership agreement.  Lacking an agreement stating otherwise, generally any partner has authority to bind the partnership.

Asset Protection
One of the biggest problems with being in a general partnership is that all partners are liable and their personal assets are vulnerable for the actions of any other partner.  This is worse than just “no asset protection.”  This structure invites liability.  Your only line of defense is insurance.

Taxation
The income of the partnership, whether or not distributed, passes through to each of the partners pro rata for tax purposes.  Each partner would see their portion of income (or losses) and deductions reported to them on a form K-1.  Those figures are used to prepare their personal tax returns.

Going Concern
When one of the partners dies, the business is dissolved and the assets distributed.

Discounting
Like a Sole Proprietorship, there is generally no discounting available for the value of business interests.  However, if restrictions are set up in a partnership agreement, there may be some discounting available.