| Business and Corporate
Law > General Partnerships General Partnerships
What is a general partnership? A general partnership is an association
of two or more persons to carry on as co-owners of a business for
profit. Formation
and management of a general partnership  In North Carolina, a general
partnership must file a certificate of assumed name with the register
of deeds in the county where the principal office is located. No
written general partnership agreement is required to form a general
partnership, thus partnerships may be formed based on oral agreements
and proven
by acts and conduct of the parties. If the partners enter
into a written agreement, the written agreement will control the partnership
with respect to the rights and obligations of the partners
except for those matters not addressed in the agreement.
If there is no written agreement, or if the written agreement does
not address a particular
issue, the North Carolina Uniform Partnership Act ("UPA")
controls the rights and obligations of the partners. What liability
do the partners have for partnership debts and obligations?
Partners have unlimited personal
liability for obligations of the partnership, and full authority
to exercise managerial control over the business unless limited
by agreement. Each partner has the apparent authority to act on
behalf of the partnership. Unless the person with whom a partner
is dealing has knowledge of the partner's lack of authority,
the partner
can bind the partnership and all other partners by his actions within
the scope of the business. This
can occur regardless of whether or not the partner is acting
in good faith. How is
the general partnership taxed? General partnerships have pass through tax treatment meaning that income and loss
is passed through to the owners and reflected on the owners' tax
returns. Although the partnership itself does not pay income taxes,
the partnerships must file informational returns with the Internal
Revenue Service.
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