A partnership is similar to a proprietorship, except two or more entities are partners in the business. When you enter into an agreement with another party to do business together, you are acting in partnership with one another which will outline the terms of the partner’s relationship and identifies how the business will be managed. The business is operated as if it were one person behind the operation and all decisions are made jointly.
There is additional exposure with partnerships, as compared to proprietorships, since you may be held liable for the actions of your partner. Partnership liability is joint and several with your partners. This means you are completely liable for everything each of you own, owe, do and have done, whether you are involved or not.
For partners who are individuals, the income from the partnership is taxed at personal income tax rates, and a percentage of the income is included on the personal income tax return of each partner