According to civil law a partnership is a contract between persons who agree to cooperate and carry on a business, contribute to it by combining knowledge, property, and effort and to share in its profits. It is created with two or more persons and needs only a verbal agreement or handshake. A partnership agreement should always be created. In some instances these agreements may be registered and available for public inspection. |
|
All partners share income and losses in the general partnership and are given certain tax benefits. The main disadvantage is probably that the partnership has a strict liability to third parties injured by the partnership. All partners are jointly liable for the debts and or judgments of the partnership. If one of the partners commits to a business venture in the name of the company each partner could be personally liable for the business' obligation resulting in huge personal financial risk. |
