A partnership company is a business structure composed of two or more co-owners (partners) who agree to run a company jointly while sharing its profits or losses.
Key Characteristics:
- Ownership and management is by partners versus shareholders.
- Liability is unlimited for debts and losses of the partnership firm.
- Profits/losses are allocated between partners as agreed.
Example:
A partnership of three individuals – two technicians and one manager – ran a small electrical repair business.
Key Takeaways:
The partnership structure provides flexibility but involves unlimited liability risk. Formal legal agreements protect partner interests while clearly delineating roles, profit-sharing and dispute resolution terms.