What are the pros and cons of partnerships?
General Partnership
PROS: pooled financial resources, shared workload to take advantage of complimentary skills, earnings taxed only as income to the partners/no separate income tax on business itself.
CONS: each owner has unlimited liability for the debts of the company, disagreements can complicate decision making, death/withdrawal of a partner can cause instability/uncertainty in the management and financing of company.
Limited Partnership -- must have at least one general partner and one limited partner. General partners actively manage company and have unlimited liability, while limited partners have limited liability but may not actively manage the partnership.
Limited Liability Partnership-- all partners may manage their company and are protected by some degree of limited liability.