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[QUOTE="Queen, post: 9622, member: 27"]
A general partnership or a traditional partnership is a default legal entity were two people decide to carry some form of business activity for an intended profit.

In a general partnership business structure both partners share profits and are also responsible in the day to day running of the business. So it's pretty much like sole proprietorship except there are now two people involved.

Keep in mind in most countries to form a general partnership there is no need to file the business since this can be done through a "verbal agreement" or a "handshake agreement".

General partnership comes with unlimited liability meaning if your partner takes a loan you will also be liable for your business partner's actions.

N.B. Each partner has unlimited personal liability, which means that any or all of each partners' personal assets can be taken in a lawsuit because partners are wholly responsible for all debts in this business structure.

Advantages of General Partnerships:
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[*]A general partnership is easy to establish and set up because of less paperwork required.
[*]General partnerships don't have to pay income tax.
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Disadvantages of General Partnerships:
[LIST]
[*]There is personal liability for all business partners in the event that the general partnership business fails.
[*]One partner can not transfer their ownership stake of the business without the consent of other business partners.
[*]General partnerships may often result in management issues when they disagree with other business partners.
[/LIST]
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