Setting Up Business Partnership | Partnership Vs Corporation

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What are the disadvantages of setting up a partnership vs. a sole proprietorship?

My wife is a sole proprietor, she's interested in converting her business into a partnership and adding me as a co-founder. Legally speaking, would this make operating our business more difficult? What are the advantages of a partnership vs. a S-Corp or a C-Corp?
  • There are many layers to your question, but I will get the ball rolling. One of the advantages to setting up a corporation is it could possibly provide you and your wife with limited personal liability from the potential debts and judgments against the business.

    Thank you,
    Doug
    www.bendlawoffice.com
  • If you go into business with your wife and do not form an limited liability company or Corp, you will be a general partnership by default. That would mean that you have unlimited personal laibility for debts and judgments of the company. I always strongly recommend that my clients operate from a limited liability entity to protect personal assets. The determination of whether and LLC vs. C-Corp vs. S-Corp is best for you is fact specific and should be made with the advice of your attorney.
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