The way a business is conducted depends on the entity used to conduct it. There are several entities one can form in order to conduct a business. One common entity used to conduct a business is a partnership. The formalities for creating a partnership are dependent on what type of partnership a person decides to form. A partnership can be formed either as a general partnership or as a limited partnership. The purpose of this article will be to provide information on partnership entities and their formation.
What is a General Partnership?
A partnership is defined as an “association of two or more persons to carry on as co-owners a business for profit.” Cal. Corp. Code § 16101(10). A general partnership is made up of only general partners, and each general partner is jointly and severally liable for the partnership. This means that a general partner is liable for the obligations of the general partnership.