Partnerships
Business owned by two or more persons, who carry on a business for profit are known as a general partnership. Each individual partner in a general partnership share the right and responsibility to manage the business. Imperative in managing a general partnership is the creation of a partnership agreement. This instrument will spell out the distribution of profits and losses, business management structure, and any other issues. This is a highly neglected area based on many individuals assumptions that things will always go well. However, when problems arise in the financial or management of the business the failure to have a partnership can and often does lead to the break up of the business. The partners in partnerships are taxed on their respective share of the partnership’s profits at the individual income tax rate.
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