Website design By BotEap.comFriendship is essentially a partnership.. – Aristotle

Website design By BotEap.com[Partnership] – There are advantages and disadvantages to each business structure. Partnerships are not exactly the same as forming corporations or companies. Each society is defined through an agreement. Once you have decided on this business structure, it is important to know the differences. This article will define the different partnership structures. These structures are: (1) partnership, (2) limited partnership, and (3) limited liability company.

Website design By BotEap.comcamaraderie – voluntary association of two or more people as co-owners in a for-profit business.

Website design By BotEap.comA partnership may be formed voluntarily by direct action of the parties, such as through a partnership agreement or articles of partnership, or its formation may be implied by the continuing conduct of the parties. The financing of a partnership comes from the partners who initially contribute goods, cash or services to the partnership accounts. Each partner is both principal and agent of the other partners and is responsible both for the acts of the others and to the others for the individual acts. A company does not pay taxes. Simply file an information return. Each partner has the duty to contribute time to the management of the company, unless otherwise agreed. A partner may not transfer their partnership status without the unanimous consent of the other partners. When a partner withdraws, retires, or dies, the partnership is dissolved, although it is not terminated.

Website design By BotEap.comlimited liability company it is a slight variation in the responsibility of those involved. The types of partners in a limited partnership include at least one general partner and one limited partner.

Website design By BotEap.comThe limited partnership certificate is simply the public disclosure of the formation and existence of the limited partnership; it does not address the many more rights and obligations that partners may agree to with each other. Both general and limited partners make contributions upon entering the partnership. The main advantage of a limited partnership is limited personal liability. Limited partnerships are taxed in the same way as general partnerships. The authority of the general partner in a limited partnership is the same as the authority of the partners in a general partnership. Transfer restrictions are imposed on limited partner interests. Upon dissolution, a partnership may continue (assuming a general partner remains); but the partnership can also be terminated after dissolution.

Website design By BotEap.comlimited liability company – newer form of business organization, in which the liability of partners is limited.

Website design By BotEap.comState statutes for an LLP are strict on the formal requirements for formation. As in partnerships and limited partnerships, LLP partners make capital contributions. In most states with LLP statutes, partners are protected from liability for the negligence, wrongful acts or misconduct of their partners. All LLP income is a flow or pass-through to partners. Partners can manage without risking personal liability exposures because the LLP is identified as such and registered with the state. The transferability is restricted and is governed by the same transfer principles of limited companies. Dissolution and termination are similar to the grounds for dissolution of limited partnerships with the requirement to notify the state.

Website design By BotEap.comPartnerships are relatively easy to set up, and partners can share the initial cost. It is important that you define what type of partnership you want to have and take the time to develop a legal partnership agreement with a clear exit strategy. Understanding the differences is a step in the right direction to set up the structure that works best for you while “creating your own lane” to business success.