There are many ways to set up a new business. For example, you can start a sole proprietorship, corporation, limited liability company, or partnership. The structure you choose has a lot to do with the type of enterprise you open and what resources you have to work with.
What are some benefits of a partnership structure for a North Dakota business?
The choice between general and limited
Partnerships give people the ability to choose whether to set up a general or limited version of the structure:
- General partnerships involve both business partners playing an equal role in the company’s ownership and operation
- Limited partnerships include partners who have less control over the company than some of the others
A limited partnership might be best if you plan on having investors who want some say in the company, but not as much as you and your general partners.
Simpler tax forms
When there is a partnership, the company’s profits and losses reflect in the partners’ individual tax returns rather than in separate business tax returns. This can make for more straightforward paperwork come tax season.
Compared to a sole proprietorship where someone starts a business by themselves, a partnership brings benefits in the form of shared financial resources and knowledge. These resources are invaluable when it comes to starting a company.
If you plan on starting a new business, think about how each business structure might best benefit you. It can be difficult to change the business structure once your company forms, so carefully consider which one is right for you.