Partnership

A partnership involves two or more partners (people or entities) carrying on a business together with a view to profit. Partnerships are governed by the Partnership Act of the state or territory in which the partnership was formed, and are limited to a maximum of 20 partners.

Partnerships have the following advantages:

• It's relatively easy and inexpensive to set up.
• Each partner has shared control and management of the business.
• Partners are jointly contributing their labor, capital and skills to build the business. This increases the businesses chance of survival/success. (as compared to sole traders). 
• Ability for income splitting.
• Easy to dissolve.
• Limited external regulation and partners business affairs are private.

The disadvantages with partnerships are:

• Each partner is jointly liable for all partnership debts (unlimited liability).
• Each partner is an agent of the partnership and is liable for actions by other partners.
• There is the risk of disagreements and conflict between partners.