Owner has direct control of decision-making process. Owner is allowed to deduct business losses against income from other sources. Owner receives all profits earned in the business. Easy to dissolve. Owner has unlimited liability.
Business has limited life.
Death or disability of the owner will jeopardize, or even terminate, the business. Ability to borrow money is limited to what the owner can secure personally. Each partner contributes money, property, labor, or skills and each expects a share in the profits or losses. Each partner is taxed on their share of the partnership at their personal income tax rate. Many partnerships fail because of unforeseen disagreements.