If two or more people are going to own and operate your business, you must choose between establishing a partnership, a corporation or a limited liability company (LLC). This section looks at the general partnership, which is the type of partnership that most small businesses will be considering.
The best way to form a partnership is to draw up and sign a partnership agreement. Legally, you can have a partnership without a written agreement, in which case you'd be governed entirely by either the Uniform Partnership Act or the Revised Uniform Partnership Act.
Beyond a written agreement, the paperwork for setting up a partnership is minimal about on a par with a sole proprietorship. You may have to file a partnership certificate with a public office to register your partnership name, and you may have to obtain a business license or two. The income tax paperwork for a partnership is marginally more complex than that for a sole proprietorship.
Put it in writing. If you go the partnership route, I strongly recommend that the partners sign a written partnership agreement, even though an oral partnership agreement is legal. The human memory is far too fallible to rely on for the details of important business decisions.
