- Like a Sole Proprietorship, a partnership is also easy to form, just the partnership agreement takes some time.
- As in a Sole Proprietorship, business profits in a partnership run straight to the personal tax return of the partners.
- Funding the business is not as hard as in a Sole Proprietorship, more partners mean more chance for funding the business
- A partnership is open to potential business partners as well as employees on the formation stage. This is a deficiency for a Sole Proprietorship, as highly skilled individuals who wants to take part in the business will not be engaged in.
- In partnerships, a partner is jointly and individually responsible for actions of other partners and they are also liable for debts of the partnership.
- In a partnership, partners share business profits with others.
- Some benefits and deductions that other types of businesses have may not be available for a Partnership
- No 'one man show' anymore, decisions are taken together. Possible disputes between partners.
- A partnership will possibly end under resignation of a partner, or when a partner passes over.
Form 1065: Partnership Return of Income
Form 1065 K-1: Partner's Share of Income, Credit, Deductions
Schedule SE: Self-Employment Tax
Form 1040: Individual Income Tax Return
Schedule E: Supplemental Income and Loss
Form 1040-ES: Estimated Tax for Individuals
Form 4562: Depreciation
Employment Tax Forms
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