Mutual agency and unlimited liability should be weighed against the tax benefits of partnership The most significant advantage of partnerships is the exemption from tax at the business level.

Partners must consider several factors when developing their partnership agreement, such as the contributions and authority of each partner and a means to resolve disputes There are many advantages and disadvantages of partnership as a form of business entity and they should be carefully considered

partnership — legal business structure consisting of an association of two or more people who contribute money, property, or services to operate as co-owners of a business. partner — individuals, corporations, and even other partnerships participating in a partnership entity. limited liability — form of legal liability in which a partner’s obligation to creditors is limited to his or her capital contributions to the firm. partnership agreement — document that details the partners’ role, the way profits and loss are shared, and the contributions each partner makes to the partnership.