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Old 18th September 2012, 10:12 AM   #1
nch1987
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Default Help Me Decide: LLC Or Partnership

I'm starting a low profile, low key, 'lets-see-if-we-can-do-this' type photography business which will have 1 partner, who will invest as much time/money into the adventure as myself (Partner is my girlfriend). We do not plan to have employees, and any money made would go towards upgrading equipment/software and such as we both have full time jobs.

We probably won't make very much money, and its not really our goal, however we do want to protect ourselves, we do want to have a bank account, and we do want to "do it right" by being registered and having an EIN.

My question is: Which is a better option here for all around purposes- LLC or Partnership? As far as my personal research, all things point to LLC. I'd like for there to be a definite answer if possible, though I am realist and realize its unlikely, ha.

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Old 18th September 2012, 03:37 PM   #2
aim4u
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yeah, that's what I went for with my business is an LLC and I like it just fine. I have a partner as well, and yeah just the tax flexibility of an LLC is what I really like about it, you can file as sole proprietor, s corporation, partnership, and I believe as a c corporation as well. Also there's alot less paperwork, all I did was articles of organization and got my EIN, then to the bank and that was all. Pretty easy, although in some states you need an operating agreement. You also have pass through taxation so you don't get taxed twice, so yeah I would go LLC IMHO. Hope this helps you some.


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Old 19th September 2012, 11:42 PM   #3
Michael321
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Even I would suggest you for LLC but still you have to take some guidance by more persons if you are not satisfied yet, idea of LLC by me is because me and my friend started the same "let see if we can" whatever type of business with a low investment so we also and by some suggestions of my elders I also went for LLC.

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Old 20th September 2012, 04:42 PM   #4
nch1987
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thanks for your input(s). A little something is better than nothing! I was swaying toward LLC and two yes's may make it easier for me to jump.

Thanks Again,

NCH

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Old 21st September 2012, 06:47 AM   #5
ArcSine
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In terms of tax ramifications in a two-owner scenario, an LLC and a partnership are nearly identical.

Where the LLC has the advantage is in terms of liability protection. With a partnership, at least one of the partners must be a so-called "general" partner, who bears a certain level of risk for exposure to business liabilities and claims.

In an LLC, on the other hand, all partners enjoy a liability protection similar to that of shareholders in a corporation.

While it's technically true that formation of an LLC requires the filing of certain docs with the state, whereas a partnership can be formed by two partners merely on an oral agreement,
When a partnership is formed this way, it's a general partnership, and all partners are thus personally liable (potentially) for debts and obligations of the partnership;
If you want the partnership to grant limited liability to some of the partners, then documents have to be filed with the state to create a limited partnership;
Whether partnership or LLC, you do NOT want to go into business without a written agreement between the partners (called an operating agreement in the context of an LLC, and partnership agreement in a partnership situation).

These three points add up to zero advantage of a partnership over an LLC when it comes to documentation and paperwork.

Best of luck with the new venture!

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Old 21st September 2012, 11:27 PM   #6
Michael321
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You're so welcome dear. Best of luck to you

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