Many in Rochester work very hard to earn the opportunity to go into business for themselves. Running a company, however, can often prove to be a burdensome task that does not allow one the time needed to participate in its core operations. If there is another that can share the management and administrative load, however, then the job can become easier and much more enjoyable. Establishing a business partnership may seem like a simple thing, yet in reality, there are a number of complexities involved with such a venture, chief of which is deciding what type partnership model to adopt.
There are three different types of business partnership models, each with their own advantages and disadvantages. These include:
- General partnerships: General partners share the responsibilities inherent with managing a business equally. According to the Houston Chronicle, general partnerships enjoy the benefits of being easy to form (and dissolve, if necessary), have the least complex structure, and offer certain tax advantages. However, general partners also share a company's debts and liabilities equally.
- Limited partnerships: Companies in which one partner accepts general partnership status while the other is only involved to a limited extent are referred to as limited partnerships. In such partnerships, the general partner accepts full control over management decisions while also agreeing to face full liability for the company's financial and service obligations.
- Limited liability partnerships: In a limited liability partnership, a limited partner is again only liable for his or her own actions in relation to the business. However, such an agreement also allows him or her to enjoy the tax benefits of a general partnership.
Which partnership will work best for an aspiring venture depends largely on the investments and resources each party involved brings to the table.