A partnership is a single business where two or more people share ownership. This kind of business is often the cheapest to create and maintain, because the partners do not need to file LLC or corporate documents with their state, and the partners do not need a contract with one another in order to have a partnership. Each partner contributes to all aspects of the business, including money, property, labor, or skill. In return, each partner shares in the profits and losses of the business.
Unlike an LLC or an S-Corp, the partners are personally liable for the losses of their partnership business. Each partner can be liable for another partner’s losses, and poorly-crafted partnerships can leave the other partners holding on to all of the liability. For this reason, many do not chose to create a partnership because of the high risk involved.
Partners are personally liable for all business debts and obligations, including court judgments. This means that if the business itself can't pay a creditor, such as a supplier, lender, or landlord, the creditor can legally come after any partner's house, car, or other possessions.