Another kind of business is the partnership. Two or more people go into business together. An agreement is usually needed to state how much of the partnership each person controls. They can end the partnership at any time.
But partnerships and individual proprietorships have a limited life. They exist only as long as the owners are alive.
Some states permit what are called limited liability partnerships. These have full partners and limited partners. Limited partners may not share as much in the profits. But their responsibilities to the organization are also limited.
A partnership is often called a pass-through entity: money passes through it to the individual partners. The federal government does not tax partnerships. But the partners are taxed on the payments they receive.
Doctors, lawyers and accountants often form partnerships to share the profits and risks of doing business. A husband and wife can form a business partnership. The Census Bureau says there are more than one-million American partnerships.
Partnerships and individual proprietorships are usually small business organizations.