Partnerships Introduction - Financial Accounting

Introduce the characteristics of a partnership type of organization. When setting up a new business, the type of entity is an important questions and consideration. When considering the characteristics of a partnership it is useful to compare and contrast them with other business entity types. A partnerships has two or more partners and has a business objective to pursue profits, similar to any business entity. A partnership has limited life unlike a corporation which can live past the life of individual partners. A partnership has more liability risk the the owners of a partnership then a corporation. The partnership is a flow through entity, meaning it is taxed a the individual level rather then the business level, eliminating double taxation. The partners in a partnership have mutual agency.