In a traditional partnership, people with common interests, resources and abilities bond together in a financial marriage of sorts. They get shares in the business which are proportional to their contributions (financial or otherwise), abilities, or some other combination of metrics. At the end of the year, the profit is calculated and those profits are distributed among the partners proportionately according to the shares they own. Unlike private and public corporations, the partners are each personally liable for all of the debts of the partnership. That means that if your partner does something stupid and costs the partnership millions of dollars, the creditors can come after you for the money.
Partnerships were attractive as a business organization to many professionals like doctors and lawyers and accountants. However, spectacular failures of some attorneys and accounting firms dimmed their enthusiasm for joint liability. New structures like 'limited liability partnerships' have been constructed which retain the profit-sharing aspects but make each partner liable only for their own actions.
The distribution of profit and the joint liability have important impacts on the culture of partnerships as we will see later.
