General Partnership

Professional services firms, family businesses, joint ventures

15 Pa.C.S. Chapter 84 (§§ 8411–8497)

Notice: Business entity selection and formation involve legal, tax, and liability considerations that vary by situation. This information is provided for educational purposes. Consult with a licensed attorney and tax professional for guidance specific to your business.

Key Facts

Formation Fee

Free

Liability

Joint and several personal liability for...

Taxation

Pass-through (Form 1065)

Owners

Two or more partners

Liability Protection

Joint and several personal liability for all partners

Tax Treatment

Pass-through (Form 1065)

Management Structure

All partners share equally (default) or per agreement

Ownership

Two or more partners

Advantages & Disadvantages

Advantages

Simple formation

Pass-through taxation

Flexible management

No state filing required

Disadvantages

Each partner is personally liable for ALL partnership debts

Each partner can bind the partnership

Disagreements can be difficult to resolve

Dissolves when a partner leaves (default)

Formation Steps

Enter into a partnership agreement (strongly recommended in writing)

Obtain EIN from IRS

Optionally file Statement of Partnership Authority with PA Dept of State

Sole Proprietorship Limited Partnership