Start a Partnership with Startup Tandem
Are you looking to start a business with a partner? A Partnership might be the perfect legal entity for you. A Partnership is a straightforward business structure that allows two or more individuals to run a business together. As partners, you share legal, financial, and managerial responsibilities for the company.
Here are some highlights of utilizing a Partnership
Unlimited Partners
A General Partnership (GP) can have any number of partners, providing flexibility for your business needs.
Non-Employee Status
In a General Partnership, owners are not considered employees of the company, simplifying the structure.
Pass-Through Taxation
Like a Sole Proprietorship, a Partnership is considered the same legal and tax-paying entity as its owners. Profits and losses “pass through” to the partners’ personal tax returns.
Personal Liability
While partnerships offer advantages, it’s essential to consider that all partners are personally liable for the business’s debts and legal obligations. In case of financial or legal issues, personal assets may be at risk.
Flexible Pay Structure
Owners typically get paid by taking owner draws, allowing them to withdraw funds from the business for personal use.
Types of Partnerships
General Partnership
Limited Partnership (LP)
Limited Liability Partnership (LLP)
Limited Liability Limited Partnership (LLLP)
Advantages of a Partnership
- Easy to start with no state registration requirements.
- No formalities or paperwork like meeting minutes or bylaws.
- Profit and loss division among partners.
- Deduct most business losses on personal tax returns.
- U.S. citizens, LLCs, corporations, and foreign entities can form a General Partnership in the U.S.
Disadvantages of a Partnership
- Potential differences of opinion between partners.
- Personal liability for business debts and legal obligations.
- Profits and losses flow through to personal tax returns.
- No legal protection for the company name (DBA may be needed).
Starting a Partnership with Startup Tandem
Starting a Partnership is relatively simple, but a well-crafted Partnership Agreement is essential to avoid future conflicts. At Startup Tandem, we can assist you in creating a comprehensive Partnership Agreement, covering critical aspects like business name, contributions, distributions, decision-making, dispute resolution, and more.
When a Doing Business As (DBA) is necessary, we can help you file it with the state or county clerk, ensuring proper disclosure to the public.
Consult with our experts and schedule a free business consultation today. At Startup Tandem, we offer 100% satisfaction guarantee, and we are here to support you throughout your partnership journey.
