If you’re considering launching a business with one or more other people, a partnership might be a legal business structure that you’re considering. Find out what partnerships are in business, and the pros and cons of setting up your small business as a partnership.

What is a Partnership?

A partnership is a business structure where two or more individuals own and operate a business together, where the owners share the profit, loss, and duties of running the business. They’re commonly used by professional service providers such as lawyers and accountants.

Pros of Partnerships

• Partnerships are easier to set up than corporations.
• Partnerships are less expensive to set up than corporations.
• The owners don’t have to run the business entirely on their own.
• Partnerships don’t pay taxes as a business (pass-through taxation).

Cons of Partnerships

• Owners have to share profits with partners.
• Owners are personally liable for the debt incurred by the partnership.
• No owner has full control over the decision-making process.
• If a partner passes away, the partnership dissolves and a new partnership would have to be formed with the remaining owners.

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Categories: Starting a Business
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