Definition of General partnership:
Unincorporated business with two or more co-owners called general partners. All general partners take active part in the firms management, are jointly and severally liable for the firms obligations, and are bound by the actions of the other general partners. See also limited partnership.
Each is responsible for their personal tax liabilities—including partnership earnings—on their income tax returns as taxes do not flow through the general partnership.
A general partnership is a business arrangement by which two or more individuals agree to share in all assets, profits, and financial and legal liabilities of a jointly-owned business. In a general partnership, partners agree to unlimited liability, meaning liabilities are not capped and can be paid through the seizure of an owner's assets. Furthermore, any partner may be sued for the business's debts.
How to use General partnership in a sentence?
- Kevin wanted to keep things simple in his new business , but soon after forming a general partnership with his frequent collaborator and best friend, he started to wonder if he needed to be more legally protected.
- The general partnership fostered open and free discussion with everyone contributing equally and brilliantly which resulted in a massive success.
- Partners should create a written partnership agreement.
- Partners assume unlimited liability, potentially subjecting their personal assets to seizure if the partnership becomes insolvent.
- Having a general partnership will allow your business to have more than one person at the top to make the key decisions.
- General partnerships are less expensive to form compared to a corporation.
- A general partnership is a business made up of two or more partners, each sharing the business's debts, liabilities, and assets.
Meaning of General partnership & General partnership Definition