What is a partnership?
A partnership can be created automatically when two or more people engage in a business for profit. The Uniform Partnership Act states: “The association of two or more persons to carry on as co-owners of a business for profit forms a partnership, whether or not the persons intend to form a partnership.” This means that the neighbor kid and his friend who run a lemonade stand on the corner of your street technically have formed a partnership.
A partnership can offer owners flexibility and relatively simple organization and operation. While it’s generally not the preferred method for starting a business, knowing some of the basics about a partnership can be a useful tool when starting a new business.