What is a Partnership? A partnership is an organization or entity in which two or more parties work together for a particular goal or simply for their own best interests. Business partnerships generally involve either individuals or corporations as partners. A business partnership will be controlled by the rules and statutes of the particular state in which it is formed.
Partnership taxation and partnership accounting depend upon the specific statutes of the state in which the partnership is located, but in general partnership taxation is based on the principle that a partnership is a flow-through organization, in which money is only taxed when it actually reaches the partnership owners.