Partnership formation

If you go into business with others who own part of the same business, you are automatically in a partnership. If you join together with one or more people to share the profits of the business and take no formal action, such as form another type of business, you have a partnership. Owners of a partnership are called partners.

Partnerships can be informal agreements to share profits and losses of a business venture. Or they may be organized with formal partnership agreements and registered with a government organization, such as a county or state.