B. General partnership
A general partnership refers to “an association of persons or anunincorporated company with the following major features: Created byagreement, proof of existence and estoppels, formed by two or morepersons, and the owners are all personally liable for any legal actionsand debts the company may face“ (
, 2009). Furthermorethe partners share equally in both responsibility and liability.
All partners in business are jointly and personally liable forall aspects of the business.
• Income taxes:
Just like a sole proprietorship , a partnership has onelevel of taxation. A partnership is not a tax-paying entity but a taxreporting entity.
• Longevity or continuity of the organization:
There are threeforms of partnerships that can affect how the company survives. Theseforms are Joint Tenancy, Tenants in Common, and Tenancy by entirety.
Partners share in control and each have equal voting rightson decisions.
• Profit retention:
Partners normally share in gross profits amongthemselves