A “general partnership” is a type of unincorporated business. It is formed automatically whenever two or more people begin doing business together without forming an incorporated entity. No filings are required to create a partnership; it simply exists (though other filings may be necessary to legally conduct business, like licenses). Because a general partnership is an unincorporated business, its owners (or “partners”) have unlimited personal liability. This means that they are personally responsible for the business’s debts – if the business owes $1,000,000, the partners owe $1,000,000. For this reason, general partnerships are rarely the correct choice of entity. Multi-owner businesses should usually consider forming an LLC, a corporation, or, in certain specific cases, an LLP or LP.
“General partnerships” are sometimes referred to simply as “partnerships.” At Origami Legal we think it is more accurate to use “partnership” as a blanket term for the various types of partnerships that can be created, including general partnerships, LLPs, and LPs.