A general partnership is an association of two or more persons to carry on a business as co-owners for profit. This form of business organization is ordinarily created by formal agreement, but a partnership may simply be created by oral agreements or may even be implied by the conduct and acts of the parties. A general partnership, like the sole proprietorship, is a business form with unlimited liability for the partners. This means that each partner's assets can be reached without limitation to satisfy partnership obligations incurred by the other partners. Unlike a sole proprietorship, a partnership must file an information return annually with the IRS.
A general partnership who wish to conduct business under a name other than the real name of the person may elect to file a Registration of Firm Name with the county Register of Deeds according to the instructions. A general partnership can also elect to file a trade name with the Secretary of State.
When starting a business it is important to make an informed decision on your business structure. Your choice or action can affect your personal liability and tax obligations. You are encouraged to seek additional information and/or obtain the assistance of a qualified accountant or attorney before finalizing your choice of legal entity.
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