The Uniform Partnership Act, adopted by many states, defines a partnership as "an association of two or more persons to carry on as co-owners of a business for profit." Though not specifically required by the Act, written Articles of Partnership are customarily executed. These articles outline the contribution by the partners into the business (whether financial, material or managerial) and generally delineate the roles of the partners in the business relationship. The following are example articles typically contained in a partnership agreement:

• Name, Purpose, Legal Address
• Duration of Agreement
• Character of Partners (general or limited, active or silent)
• Contributions by Partners (at inception, at later date)
• Business Expenses (how handled)
• Authority (individual partner authority in conduct of business)
• Separate Debts
• Books, Records, and Method of Accounting
• Division of Profits and Losses
• Draws or Salaries
• Rights of Continuing Partner
• Death of a Partner (dissolution of winding up)
• Employee Management
• Release of Debts
• Sale of Partnership Interest
• Arbitration
• Additions, Alterations, or Modifications of Partnership Agreement
• Settlements of Disputes
• Required and Prohibited Acts
• Absence and Disability
• Some of the characteristics that distinguish a partnership from other forms of business organization are the limited life of a partnership, unlimited liability of at least one partner, co-ownership of the assets, mutual agency, share of management, and share in partnership profits.

Kinds of Partners

• Ostensible Partner: Active and known as a partner.
• Active Partner: May or may not be ostensible as well.
• Secret Partner: Active but not known or held out as a partner.
• Dormant Partner: Inactive and not known or held out as a partner.
• Silent Partner: Inactive (but may be known to be a partner).
• Nominal Partner (Partner by Estoppel): Not a true partner in any sense, not being a party to the partnership agreement. However, a nominal partner holds him or herself out as a partner, or permits others to make such representation by the use of his/her name or otherwise. Therefore, a nominal partner is liable as if he or she were a partner to third persons who have given credit to the actual or supposed truth of such representation.
• Sub partner: One who, not being a member of the partnership, contracts with one of the partners in reference to participation in the interest of such partner in the firm's business and profits. Limited or Special Partner: Assuming compliance with the statutory formalities, the limited partner risks only his or her agreed investment in the business. As long as he or she does not participate in the management and control of the enterprise or in the conduct of its business, the limited partner is generally not subject to the same liabilities as a general partner.

Advantages of the Partnership:

• Ease of formation. Legal informalities and expenses are few compared with the requirements for creation of a corporation.
• Direct rewards. Partners are motivated to apply their best abilities by direct sharing of the profits.
• Growth and performance facilitated. In a partnership, it is often possible to obtain more capital and a better range of skills than in a sole proprietorship.
• Flexibility. A partnership may be relatively more flexible in the decision making process than in a corporation. But, it may be less than in a sole proprietorship.
• Relative freedom from government control and special taxation.

Disadvantages of a Partnership:

• Unlimited liability of at least one partner. Insurance considerations such as those m
• Unlimited liability of at least one partner.< Insurance considerations such as those mentioned in the proprietorship section apply here also.
• Unstable life. Elimination of any partner constitutes automatic dissolution of partnership. However, operation of the business can continue based on the right of survivorship and possible creation of a new partnership. Partnership insurance might be considered.
• Relative difficulty in obtaining large sums of capital. This is particularly true of long term financing when compared to a corporation. However, by using individual partners' assets, opportunities are probably greater than in a proprietorship.
• Firm bound by the acts of just one partner as agent.
• Difficulty of disposing of partnership interest. The buying out of a partner may be difficult unless specifically arranged for in the written agreement.