A partnership is a business with multiple owners that is easy to setup and run. There are very few government registration requirements. You and your partners will agree how to administer and govern your partnership in your partnership agreement.
As a partnership, you enjoy pass-through taxation, meaning you report your business income on your personal tax returns. Each partner reports and pays taxes on his portion of business profits or losses on his personal income taxes.
A General Partnership (GP) is the default business structure when you and your business partners start conducting business. A general partnership is not a separate business entity from the owners and will not protect your personal assets. When one or more partners wish to protect their personal financial and legal exposure, the partnership registers a Limited Partnership (LP) or a Limited Liability Partnership (LLP).
You may know that you are a general partnership by default as soon as you start doing business. While this is true, it is important to file any required government paperwork to register the business.
Unless your business name contains the legal surnames of all partners, you are required to register a fictitious name to gain authority to use your business name. For instance, the partnership of John Doe and Jane Deer would not need to register a fictitious name for “Doe and Deer’s Plumbing” but would need to register a fictitious name for “Perfect Plumbing”.
Partnerships are required to obtain an Employer Identification Number (EIN). You will use this identifier must like a Social Security Number for the business. Obtaining an EIN is also necessary for hiring employees and may be required to open a business bank account.