Issue or Consideration Sole Prop. General Partnership Limited Partnership Limited Liability Co Subchapter “C” Corporation Subchapter “S” Corporation Liability Unlimited personal liability Unlimited personal “Joint and Several” liability for Partnership Gen Partners (at least 1):unlimited liability Limited Partners: Limited to investment Shareholders- no personal liability beyond investment Shareholders- no personal liability beyond investment Ease of Formation No formal requirements No formal requirements Requires formal filing Requires formal filing Requires formal filing and qualification and “election” with IRS Ease of Operation No issue Limited concern- as agreed ONLY General Partners operate No participation of Limited Partners Shared operation between Directors (major decisions) and Officers (day- to- day) and Shareholders (fundamental changes) Shared operation between Directors (major decisions) and Officers (day- to- day) and Shareholders (fundamental changes Taxation No additional tax issue or burden Partnership return with Pass through to individual partners Partnership return with Pass through to individual partners Possibility of double taxation Avoids possibility of double taxation Capitalization Limited to loans (usually banks) Limited to loans (usually banks) Also have limited partner investment Issue stock or Bonds Issue stock or Bonds Duration Limited duration Limited duration Limited duration (gen. Partners) flexibility with limited partners Perpetual Perpetual Alienation No No No-General Possible with Limited partners Simple stock transfer Simple stock transfer Partnership Form of Business The partnership is defined as the type of business operation formed between two or more persons interested in a common course: Making profits. The government recognizes a few kinds of partnerships (Lorette, n.d., para. 1). At the point when setting up an association, the first thing you will need to do is pick a name for the organization. While this may sound basic, it is imperative to make certain the name does not abuse the trademark privileges of another business. There are a few approaches to figure out whether another business as of now, has such a name. Firstly, one can do a name search online on the U.S. Patent and Trademark Office website. Also, one can conduct an inquiry of enrolled entrepreneurs. However, this procedure is followed via the legal office (secretary of state.) Likewise, partners should decide the specifics of how the organization will be overseen, how much every accomplice will contribute, and how the benefits will be shared. While the more prominent the extent of the venture implies the bigger the rate of proprietorship, the greatest investor may not even need to maintain the business. Additionally, while you may confirm that all accomplices have equal force in choice making, certain accomplices ought to be recognized as having the power to settle on choices on everyday operations and the general ad ...

1. Issue or Consideration
Sole Prop.
General Partnership
Limited Partnership
Limited Liability Co
Subchapter “C”
Corporation
Subchapter “S”
Corporation
Liability
Unlimited personal liability
Unlimited personal “Joint and Several” liability for Partnership
Gen Partners (at least 1):unlimited liability
Limited Partners: Limited to investment
Shareholders- no personal liability beyond investment
Shareholders- no personal liability beyond investment
Ease of Formation
No formal requirements
No formal requirements
Requires formal filing
Requires formal filing
Requires formal filing and qualification and “election” with
IRS
Ease of Operation
No issue
Limited concern- as agreed
ONLY General Partners operate
No participation of Limited Partners
Shared operation between Directors (major decisions) and
Officers (day- to- day) and Shareholders (fundamental changes)
Shared operation between Directors (major decisions) and

2. Officers (day- to- day) and Shareholders (fundamental changes
Taxation
No additional tax issue or burden
Partnership return with Pass through to individual partners
Partnership return with Pass through to individual partners
Possibility of double taxation
Avoids possibility of double taxation
Capitalization
Limited to loans (usually banks)
Limited to loans (usually banks)
Also have limited partner investment
Issue stock or Bonds
Issue stock or Bonds
Duration
Limited duration
Limited duration
Limited duration (gen. Partners) flexibility with limited partners
Perpetual
Perpetual
Alienation
No
No
No-General
Possible with Limited partners
Simple stock transfer
Simple stock transfer
Partnership Form of Business
The partnership is defined as the type of business operation

3. formed between two or more persons interested in a common
course: Making profits. The government recognizes a few kinds
of partnerships (Lorette, n.d., para. 1). At the point when setting
up an association, the first thing you will need to do is pick a
name for the organization. While this may sound basic, it is
imperative to make certain the name does not abuse the
trademark privileges of another business. There are a few
approaches to figure out whether another business as of now,
has such a name. Firstly, one can do a name search online on
the U.S. Patent and Trademark Office website. Also, one can
conduct an inquiry of enrolled entrepreneurs. However, this
procedure is followed via the legal office (secretary of state.)
Likewise, partners should decide the specifics of how the
organization will be overseen, how much every accomplice will
contribute, and how the benefits will be shared. While the more
prominent the extent of the venture implies the bigger the rate
of proprietorship, the greatest investor may not even need to
maintain the business. Additionally, while you may confirm that
all accomplices have equal force in choice making, certain
accomplices ought to be recognized as having the power to
settle on choices on everyday operations and the general
administration of the business. Making prior auxiliary
determinations will guarantee that the enterprise begins off
quickly.
Two types of partnership are most common; they include
limited and general partnerships. If the business more than one
person, it is wise to considers setting it up as a partnership. As
such, partnership presents itself in two ways: general and
limited partnerships. In the former, the accomplices familiarize
and accept duties regarding the businesses policies and
responsibilities.
The latter has general and limited partners. General partners are
the owners who control the business and have set out specific
responsibilities to specific partners. On the other hand,
restricted accomplices assume the role of investors; therefore, it
means that they have no power over the organization; and

4. hence, they cannot be subjected to similar liabilities with the
general partners.
Not if there is an expectation of numerous inactive speculators,
limited partnerships are not deemed to be the best choice. The
reason is the required filings and organizational complexities.
One of the real focal points of an organization is the tax
treatment it enjoys. A partnership is not inclined to pay a charge
on its wage, however, it must pass the generated profits and
incurred losses to the business partners. In the event of taxation,
a partnership must document a government form that provides
sufficient details about revenues or incomes and its losses.
Likewise, partners are required to give relevant details of their
profits and losses.
Personal risk is a critical factor when one considers setting
up any form of partnership. Similar to entrepreneurs, general
partners assume liability on an individual level, the dangers of
the partnership’s responsibilities and commitments. Notably, a
major partner can monitor and also represent for business. For
instance, they can take out advances and agree on choices that
are expected to impact and bind the partners if the terms of the
agreement allow it. Likewise, it is imperative to note that
partnership is costly compared to sole-proprietorships. The
reason is that they require more complicated legal procedures
and book-keeping practices.
If one chooses to come up with a partnership form of business,
it is essential to set up an association agreement that highlights
means of making business choices, debating strategies, and
dealing with a buyout. It is helpful if for unknown reasons there
is a disagreement between partners or when a person needs to
take advantage of a similar game plan.
Such an agreement addresses the motivation behind the business
and the power entitled to every partner, and their
responsibilities in the enterprise. Similarly, “it is important to
seek legal advice from a lawyer with sufficient experience in
the business realm to aid in making the agreement” (Sba.gov,
n.d.) For instance, it stipulates clearly the mode of making

5. decisions.
Likewise, it is crucial to come up with a voting strategy and
exclusive voting rights if a disagreement arises among partners.
Notably, if the partners have exactly equal shares, there's the
likelihood of a gridlock. To evade such a situation, it is a
common practice for some business to involve a third partner in
advance. As such, it should be a trusted partner entitled to one
percent of the company, and who has critical vote necessary for
breaking a tie.
The other important factor is sharing of interests among
partners. It is cumbersome, for two proprietors to just as offer
possession and power. On the other hand, if one chooses to do
it, one must ensure the proportion is expressed unmistakably in
the agreement. From a source of capital perspective,
“partnerships get their money via loans, plowed back profits,
additional partners, and also individual contributions” (Lorette,
n.d.)
Taking everything into account, partnerships can be said to be
moderately inexpensive and with structures that are simple to
establish. A lot of time used in coming up with a partnership is
consumed during the formation of the association agreement.
Also, in this type of business, every accomplice is at a benefit
of pooling resources into the achievement of the enterprise. A
Partnership has an upper hand in pooling assets to acquire
capital. This could be valuable when securing credit, or
doubling seed cash.

6. References
Lorette, K. (n.d.). Sources of finance for partnerships. Demand
Media. Retrieved from http://smallbusiness.chron.com/sources-
finance-partnership-3663.html
Sba.gov (n.d.). Choose your business structure: Partnership.
Retrieved from https://www.sba.gov/content/partnership
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