Partnerships are a type of business structure where two or more people own and operate a business together. In a general partnership, each partner is personally liable for the business debts and obligations. In a limited partnership, there are both general and limited partners, with the latter having limited liability.
Partnerships are often preferred by small businesses because they are relatively simple to set up and have fewer formalities compared to corporations. In terms of taxes, partnerships are pass-through entities, meaning that the business income is passed through to the individual partners and taxed at their individual tax rates.
