What is a Partnership?

A Partnership is a legal form of business operation conducted between two or more individuals who share responsibility for the management, profits and losses of a business.

How many partners can be in a partnership?

There must be at least two or more partners within the partnership, and there is no limit to how many partners you can have in a partnership.

Advantages of a Partnership

  • Easy to establish
  • Uncomplicated tax structure: partnerships are not taxed as their own entity, each partner is responsible for the profits and losses of the business and each files an individual tax return
  • Two brains are better than one: with each partner, you have access to more skills, knowledge, and an increased ability to raise funds for the business

Disadvantages of a partnership?

  • Personal liability: general partners are responsible entirely for all business profits and debts formed by the partnership
  • Profits are shared equally depending on the initial contract agreement: this can essentially lead to inconsistency where one or more of the partners is not putting in a fair share of the efforts but is however still receiving reoccurring rewards from the business
  • Unclear authority and vagueness of each partner’s responsibility can result in disagreements or conflict

What do I need to do to register a partnership?

To register a new business as a partnership the below registrations are typically required:

  • DBA (Fictitious Business Name)
  • Business License (Tax Registration Certificate)
  • Tax ID # (EIN)


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