Here are some notes about the distinction between partnership and limited liability company (LLC) in detail:
A partnership is a business structure where two or more people own and operate a business together. The partners share the profits and losses of the business, and they are also personally liable for the debts and obligations of the business.
An LLC is a business structure that offers the limited liability protection of a corporation with the flexibility of a partnership. The owners of an LLC are called members, and they are not personally liable for the debts and obligations of the LLC. However, members can still be held liable for their own actions and those of their employees.
Here are some additional things to consider when choosing between a partnership and an LLC:
- Liability protection: If you are concerned about personal liability, an LLC is the better option.
- Taxation: If you want to be taxed as a partnership, an LLC is the better option. If you want to be taxed as a corporation, you can choose to have your LLC taxed as a corporation.
- Management: If you want to have more control over the management of the business, you may want to choose a partnership. If you want to have more flexibility in the management of the business, you may want to choose an LLC.
- Continuity of life: If you want the business to continue to exist even if a partner dies or leaves the partnership, an LLC is the better option.
- Transferability of ownership: If you want to be able to transfer your ownership interest in the business easily, an LLC is the better option.