A general partnership is a type of legal structure where two or more individuals co-operate or form an association in order to establish a business, for the purpose of making a profit as a group. The incorporation process is also known as company formation. Profits are usually distributed equally between the partners, who are also equally personally liable for the entire company. However, the general partnership dissolves if one of the partners decides to withdraw from the shared business.

While general partnerships offer some tax exemptions, it should be noted that they have a major personal liability disadvantage. In a general partnership, the actions of one partner are automatically considered endorsed by the others, so each partner is personally liable for the actions of the other. The liability of the partners in a general partnership can be summarized as follows:

Each partner is responsible for his own actions.
Each partner is responsible for the actions of all other partners.
Each partner is responsible for the actions of the employees of the partnership.
Therefore, we strongly encourage you to think twice and carefully review your potential business partners. A good alternative to the general partnership can be a limited partnership or limited partnership.

General partnership owner
The owners of a partnership are called "general partners" and have unlimited liability for the company. After the conclusion of the founding agreement, they are regarded as shareholders. Each partner has the authority to transact business on behalf of the company without the permission or approval of the other general partners. General partners must always take tax planning into account and it is strongly recommended that they do not take significant risks on behalf of the company as doing so would put their personal wealth at risk.

Functions of an open trading company
General partnerships are formed for various reasons and have certain legal implications such as the procedures of company management, profit-sharing, liability for members' debts, etc. Profits are always divided equally among all members of the company and they have absolute individual rights to direct and lead the company. In addition, all partners are liable if one or more of them transacts business with a third party, since each partner can contract and execute on behalf of the entire partnership.

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