Major characteristics of partnerships are:
- Partnerships have a limited life.
- Partners have unlimited personal liability (unless they are silent partners in a limited partnership in which case their liability is limited to the amount of their investment).
- All full partners have the right to use partnership property.
- All full partners are bound by contracts entered by other partners.
- All partners share in profits and losses.
- A partnership is a non-taxable entity. Income taxes are only paid by partners to the extent of their share of profits. Information forms must, however, be sent annually to the Internal Revenue Service indicating the income of the business and the payments received by the partners.