In a partnership, two or more persons agree to share ownership, management responsibilities, and liability for a business. In a general partnership, all partners have unlimited personal liability for all partnership debt. In a limited partnership, the general partners are personally liable for the partnership debt, while the limited partner has no such liability beyond his or her personal investment. Each general partner can act on behalf of the business. A general partnership is relatively easy to organize.
Creditors can go after personal assets.
Partnership ends on death of a general partner and a new agreement is required each time a partner joins or leaves the business. It is often difficult to disengage from an uncooperative partner. A partnership must file a notarized Certificate of Doing Business as a Partnership at the County Clerk's office. See additional comments under sole proprietorship . To protect against future disputes, prepare a formal written partnership agreement setting out how much capital each partner will contribute, how the business will be managed, how responsibility and authority will be shared, and how the profits will be divided.