Every type of business entity inevitably has a variety of both advantages and disadvantages associated with it. Today, we are focusing on partnerships in business and what specific benefits are associated with them. There are two types of partnerships in business: general partnerships and limited partnerships. In a general partnership, there is a joint ownership of the business in which profits, losses, and management responsibilities are shared. In a limited partnership, however, there is typically one dedicated general partner and an additional 1-2 limited partners who provide assets but do not make management decisions.
People choose to go into a business partnership for a variety of reasons. Depending upon the specific industry, competition, and business idea, having a team approach may make the most sense. The following are some of the most notable advantages of forming a partnership in business:
- Split startup costs
- Two minds to brainstorm ideas
- Larger borrowing capacity
- Potential tax savings through income splitting
- Take advantage of strengths from each partner
- Minimal legal restrictions
- Improved work/life balance
- Consistent moral support
- Different perspective on strategy
- Shared responsibility, thus reduced pressure
Taking the entrepreneurial leap in the form of a partnership is often easier, less stressful, and more conducive to a quick start. Determining the right structure for your business is an important decision requiring experienced legal guidance. Through careful consideration of your goals, our proactive business formation services can help you choose which path is the right one for you whether it be a sole proprietorship or general partnership, limited partnership, limited liability company, limited liability partnership, “C” Corporation, or “S” Corporation. Contact our office today to get started on your new business.
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