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Partnership

Taxation

One of the primary reasons to form a partnership is to obtain its favorable tax treatment. Because partnerships are generally considered an association of co-owners, each of the partners is taxed on her or his proportional share of partnership profits. Such taxation is considered "pass-through" taxation in which only the indimvidual partners are taxed. Although a partnership is required to file annual tax returns, it is not taxed as a separate entity. Rather, the profits of the partnership "pass through" to the individual partners, who must then pay individual taxes on such income.

Additional topics

Law Library - American Law and Legal InformationFree Legal Encyclopedia: Ordinary resolution to Patients' Rights - ConsentPartnership - Formation, Relationship Of Partners To Each Other, Relationship Of Partners To Third Persons, Liability