When you are thinking about starting a business, you typically have three ways to go about doing so. You can opt for a limited liability corporation, a sole proprietorship, or a partnership. All three options have their own unique set of advantages and disadvantages, which is why it’s important to make sure you understand them all prior to moving forward. Today, we will be discussing partnerships and why they can be a great option for a new business. If you have any questions about what option is best for starting your business or if you are looking for the best legal advice, contact Derryberry & Associates LLP today.
The Advantages of a Partnership
A partnership means that you and your partner will be sharing in both the risks and rewards of the business. You call the shots, along with your partner, can you really have the opportunity for great financial gain if you do things right. One of the main advantages of a partnership is that you have full decision-making capabilities along with your partner. You won’t have to get board approval or wait for shareholders to vote on something before making a decision.
Another big benefit to partnerships is that they offer flexibility. A partnership is a business that is generally easier and more straightforward to run than other options. They are less strictly regulated by the government and are very flexible in terms of management. Lastly, the idea that partners share the responsibility of running the business is a huge plus. As a partner, you are very invested in the company and will give your best to make sure it succeeds.
The Disadvantages of a Partnership
It’s important to note that no business is perfect. Partnerships certainly provide a lot of perks, but they can also come with their fair share of disadvantages as well. Disagreements can be hard to deal with. You need to keep this in mind when choosing your partners and make sure you have a great business lawyer by your side to draft a deed of partnership so that you can resolve disagreements swiftly. Also, partnerships are subject to unlimited liability, which means that all of the business risks fall upon the partners. There are also certain tax disadvantages that can make partnerships less desirable for entrepreneurs and startup owners.
A partnership can be a great option for starting a business, but only if you are aware of the downsides as well. If you are looking for advice about which business type is best for your own unique needs, you can always reach out to a business attorney for advice. Derryberry & Associates LLP can help you with drafting any contracts for your company and provide you with the legal advice you need to make the best possible decision. We can also help you create a Limited Liability Partnership and ensure that your business starts off on the right foot from a legal standpoint.