A general partnership is formed by default, whenever two people work together on a business in a way that indicates a partnership has been established. Some factors that indicate a partnership formation include: sharing of work, sharing of profits/losses, sharing of business capitalization, and holding the business out as a partnership to the general public. Of course, in addition to a partnership formed by action, a business can also file an official record indicating the formation of a general partnership.
In contrast to a general partnership, a limited partnership may only be formed through specific legal filings. These filings are known as a “certificate of limited partnership” and are filed with the South Dakota Secretary of State's Office. The name of the business organization must contain the words limited partnership, or an abbreviation such as LP. A limited partnership must also contain at least one limited partner and one general partner.
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