What is the legal definition of a business partnership?

A business partnership is a legal entity created when two or more people join together to form a business. In South Carolina, a partnership is defined as “an association of two or more individuals for the purpose of conducting a business or other activity for profit.” A partnership does not file a separate tax return, instead each partner files their own return and pays taxes on their respective share of the income. Most states require at least two people in order to form a partnership. South Carolina requires that a written partnership agreement is put in place that should include the name of the partnership, the purpose of the business, a description of the capital contributions of the partners, and the roles of each partner in the business. It is important to note that each partner in the business is liable for the debts of the business entity and because of this, they can be held liable for the actions of other partners. To protect partners from personal liability, they must purchase liability insurance. This insurance will provide protection to the partners in case the partnership is sued or faces financial hardship. All partners in a business partnership must contribute to the capital of the business, but their share does not necessarily have to be equal. The contributions of each partner should also be documented in the partnership agreement. In South Carolina, business partnerships are regulated by the same laws that govern corporations and limited liability companies. It is important to understand that a business partnership can have different levels of responsibility and liability depending on the type of business structure.

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What is the legal definition of a business partnership?

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