What Is A Partnership?
You may be asking how to form a Nevada Partnership. Let’s define what a partnership is first. A Partnership is a type of business entity where two (2) or more people are in agreement to form and conduct business. Partnerships can be in a form of LIMITED PARTNERSHIPS (LP) or LIMITED LIABILITY PARTNERSHIPS (LLP).
In a Limited partnership setup (LP), only one partner has unlimited liability while other partners are limited. Partners with limited liability are also limited in their control or authority as documented in the partnership agreement.
Limited Liability Partnership
Limited Liability Partnerships (LLP) have a similar setup with LP but limited liability applies to every member or owner. It protects each partner from debts incurred by the partnership, and won’t be responsible for the actions of other partners.
This form of entity is ideal for business structures with multiple owners and groups in the formative stage of launching their business ideas.
The major advantage of a partnership is the fact that it is a pass-through entity that doesn’t pay its own income tax. It is filed as an informational tax return with the IRS (Form 1065). The prorated share of income and expenses are reflected on each partner’s personal return where due taxes are paid by the partners. Unfortunately, this setup has increased personal liability. Each member of the partnership is legally responsible for the financial obligations of the business.
Seek Assistance From An Attorney
Establishing a partnership agreement on hand with an attorney’s assistance is strongly advisable to outline how the partnership will operate and the details on how to handle cases when partners leave, adding new partners, changing the business, or shutting the business down.
If you want to know how to form a Nevada Partnership, here are the steps.