Partnership
Accounting glossary · Understand, connect, apply
A partnership is a business relationship in which two or more persons carry on an enterprise as co-owners under applicable law and their agreement.
Example
Two partners contribute capital and agree to share profits 60:40, even though their initial contributions are equal.
Remember the difference
Profit-sharing, management rights and legal liability depend on the agreement and the type of partnership.
Updated 3 November 2026. Examples are simplified for learning. Where a term depends on US law, IFRS, US GAAP or a historical rule, check the context explained above and the requirements relevant to your course.
Study references: OpenStax financial accounting and managerial accounting. For reporting requirements, consult the applicable IFRS Standards or FASB guidance. US tax terms should be checked against the relevant tax-year IRS instructions.
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