 Hello in this lecture we will define partnership according to fundamental accounting principles wild 22nd edition the definition of partnership is unincorporated association of two or more persons to pursue a business for profit as co-owners so a partnership is including two or more individuals that have a purpose of generating revenue and who are not incorporated for example if we had two individuals starting a restaurant and they started to generate revenue in the restaurant the goal of the restaurant being revenue generation then they would have a general partnership and as a general partnership they would have co-agency meaning both partners could then make decisions and sign contracts as an agent of the business of the partnership they also have subject to liability in terms of both liability for the assets that are put into the partnership as well as personal assets in a similar way as a sole proprietor partnerships are easy to set up as our sole proprietorships in that if they just get together and start doing business typically they are a partnership the drawback being that there is less liability protection to the personal assets of the individual partners within a partnership they are also subject to income tax in terms of the flow through of the income going from the business the partnership to their individual tax returns and the tax being paid on the individual level