This lesson examines the definition of a partnership. It highlights the definition of a partnership and how it differs from the sole proprietorship (the only other business organization that exists without first satisfying formal filing requirements).
It details the characteristics (factors) examined when answering the factual question: Is this a partnership or something else?
The answer to this question is important because different answers may give rise to different legal consequences. If there is a partnership, the parties are partners with the resulting rights and obligations. If there is no partnership, the parties have a different relationship--perhaps employer/employee (principal/agent) or debtor/creditor--with different rights and obligations.