Partnership?
A partnership is a form of business where two or more people share ownership, as well as the responsibility for managing the company and the income or losses the business generates. That income is paid to partners, who then claim it on their personal tax returns – the business is not taxed separately, as corporations are, on its profits or losses.
There are three types of partnerships:
*General partnership
*Limited partnership
*Joint venture
(General Partnership)
In a general partnership, each partner shares equally in the workload, liability, and profits generated and paid out to the partners. All partners are actively involved in the business’s operations.
(Limited Partnership)
Limited partnerships allow outside investors to buy into a business but maintain limited liability and involvement, based on their contributions. This is a more complicated form of partnership, which also has more flexibility in terms of ownership and decision-making.
(Joint Venture)
Short-term projects or alliances that bring together multiple partners for a project are typically structured as joint ventures. If the venture performs well, it can be continued as a general partnership. Otherwise, it can be shuttered.
Pros
There are several advantages of choosing to structure a business as a partnership, which include:
Fairly easy to set up and maintain over time
Partners can pool their resources to fund the company’s start-up
Partners can share the workload and the rewards of the business’s success
Being able to offer key employees the potential to one day become a partner in the business can be a big carrot that encourages them to stay long-term.
PLSB$$$
DD PAYS IN THE LONG RUN!
SO DIG IN
