Choosing the right business structure is a must for continued success and growth. According to Business News Daily, partnerships are commercial enterprises created by two or more distinct parties. They offer benefits like increased manpower and reduced tax burden. They can also put you in a better position financially since both you and your partner are able to contribute.
You can choose between a few different types of partnerships. Because it is such an important decision, here are a few things to keeping regarding the different types.
General partnership
General partnerships are attractive because they are relatively easy to create. For example, they do not require you to register your business on the state level. They also do not require any sort of formal agreement between you and the other partners. However, they do leave you vulnerable when it comes to liability issues.
Limited liability partnership
If you are looking for protection against lawsuits, a limited liability partnership is a way to go. With this business structure, you cannot incur personal liability for an issue involving your business. You are also protected from any liability issues involving the other partners. This is in contrast to limited liability company partnerships, which provide personal protection but leave you vulnerable to the actions of the other partners.
Limited partnership
This business structure entails one general partner and one limited partner, although it is possible to have a greater number of limited partners. The general partner holds all liability, but they also make all decisions related to the business. On the other hand, the limited partners cannot make decisions, have any personal liability, and are basically considered silent partners.
No matter what type of partnership you choose, make sure there are legal protections in place to safeguard your interests. You should also develop a dispute resolution process in case a disagreement arises.