What kind of business partnership should you have?
Recently, we discussed some considerations you might want to account for when selecting a business partner. If you’ve gotten that far, and are moving on to the next step of incorporating your business, you should be aware of possible business structures so you can choose the one that will work best for your company.
If you are entering into a business partnership, it means that you and another person(s) will own the business together. This means that the legal agreement between you needs to accurately reflect the nature of this relationship. You may want to consider consulting a legal professional to learn more.
There are several types of business partnerships. A general partnership means that there will be an equal division of duties. According to the Small Business Administration (SBA) website, this could include responsibilities surrounding management, profits and liability.
Two other types of business partnerships are joint ventures and limited partnerships. One of the differences between a general partnership and a joint venture is that a joint venture is only for the duration of a project, or for a limited time. With limited partnerships there will be restrictions on aspects of the business like liability.
The partnership structure is just one type of business structure. Others that you can choose from include S corporation, cooperative and limited liability company. Each of these structures will carry their own tax and legal requirements. The needs of your business will help you determine which structure will be the best match.
When it’s time to incorporate your business, an online incorporation services company will provide you with information to help you determine which structure is best for your venture.