General partnership

A general partnershipEntity typesGeneral partnershipTwo or more people carrying on a business together for profit without forming another entity. Each partner is personally liable for the partnership's debts; it files Form 1065 and pays no income tax itself is two or more people in business together without forming anything else. Like a sole proprietorship it can exist without paperwork. Each partner is personally liable for the partnership's debts, including the ones another partner ran up.

For tax it is a pass-through entityEntity typesPass-through entityAn entity whose income is taxed to its owners instead of itself — a partnership, an S corporation, a disregarded entity. Each owner is taxed on their share of the income, which need not match the cash the entity pays out. The partnership files Form 1065, an information returnTaxInformation returnA return that reports a payment to the IRS and to the person paid, rather than computing a tax — Form 1099-NEC, 1099-MISC, 1099-K, W-2, 3921. Due dates are per form, and §7503 moves a weekend date to the next business day, and gives each partner a Schedule K-1Entity typesSchedule K-1The statement a partnership (with Form 1065) or an S corporation (with Form 1120-S) gives each owner, reporting that owner's share of income, deductions and credits for their own return with their share. It pays no income tax itself. Each partner pays income tax on their share, and a general partner owes self-employment taxEntity typesSelf-employment taxSocial Security and Medicare on net earnings from self-employment — 92.35% of net profit, taxed at 12.4% up to the year's wage base and 2.9% on all of it — owed once net earnings reach $400, with half deducted from income. Sole proprietors and general partners pay it on Schedule SE on it.