Partnership, LP & Limited Liability Partnerships

A partnership is the relationship existing between two or more persons who join to carry on a trade or business.  Each person contributes money, property, labor, or skill and shares in the profits and losses of the business.

A partnership must file an annual information return to report income, deductions, gains, losses, etc. from its operations, but it does not pay income tax. Instead, profits or losses are passed through to its partners.  Each partner includes his or her share of the partnership's income or loss on his or her tax return.

A Limited Partnership (LP) is a business arrangement whereby the operation is administered by one or more general partners and funded by limited or silent partners who are legally responsible for losses based solely on the amount of their investment.