A partnership is a business organization wherein the owners of the business, known as partners, share in the profits and losses of the business conducted as the partnership. Partnerships can be general partnerships, limited partnerships or limited liability partnerships. Each state contains different regulations which related to the formation and operations of a partnership. There are no federal laws relating to the formation of a partnership. However, the Internal Revenue Service ("IRS") treats partnerships the same. The Internal Revenue Code, Title 26, Subchapter K of Chapter 1 creates tax consequences for the partnership and, as such, this regulations operates as a federal statutory scheme for governing partnerships. Partnerships are frequently sought for tax benefits, in that the partnership is not usually subject to a dividend tax; rather, the tax is incurred only after it is distributed to the individual partners. Partnerships are frequently referred to as a "flow through" or "pass through" tax entities, since the owners of the business pay their own share of the entity's taxable income.