The Pros And Cons Of Partnerships
A1c: The Limited Partnership is a business form in which investors known as limited partners agree to share in the profits of a partnership without having a voice in partnership management.
· Liability: General partners are seen as legally the same entity as the partnership. They are jointly and severally unlimitedly liable to their creditors. Creditor may go after the assets of partnership unit, and further may go after each individual general partner’s personal assets to satisfy a liability. A limited partner’s liability is limited to the amount of their investment.
· Income Taxes: All partners pay taxes on their share of profits as personal income.
· Longevity/Continuity: The death of any general partner causes the partnership to dissolve.
· Control: No single partner controls the partnership. All general partners have a voice in the daily business workings of the partnership. A limited partner is not allowed to take part in running the …show more content…
It will make your company appeal to new customers by making your operations seem legitimate and credible. This additional credibility can also be important to attracting the additional capital investment you’re seeking.
Your liability as the owner of the company would also change once you become an S-Corporation. As you operate right now, you, the owner, are entirely and personally responsible for any and all liabilities. Once you file the Articles of Incorporation in your state, along with IRS Form 2553, and become an S-Corporation, you will no longer be personally liable. If a cabinet falls from the wall, causing an injury or a truck causes an accident, your personal property and assets will be protected from any claim against your company.
Your company is growing rapidly and you want to expand your operation into a neighboring state. Your corporate status would allow for that flexibility. You would have to file the Articles of Incorporation in the state you’re expanding into, as well as apply for any required licenses and insurance. You may also have to pay applicable franchise