Business Structures: Partnership

A partnership is a relationship between two or more persons who join together to carry on a trade or business. There are two type of business partnership structures:

A General Partnership is an agreement with one or more individuals to jointly own or share profits of a business. There are no limits to the number or type of partners (types of partners include individuals, other partnerships, or corporations).

A Limited Partnership consists of one or more general partners (those who are generally liable for the business) and one or more limited partners. A limited partner is one who have limited liability in the business. This structure must file organizing documents with the Oklahoma Secretary of State.

What Is Good about This Business Structure:

• Easy to organize.
• Greater financial strength than sole proprietorship.
• Combines skills and judgements with partner(s).
• Definite legal status.
• Each partner has a personal interest.

What Is Bad about this Business Structure:

• Unlimited liability for each partner.
• Decision authority is divided.

For more information about business structures, bookkeeping methods and taxation, the Oklahoma Tax Commission offers Business Tax Workshops. Make your reservation today!