Business formation can be a very confusing and time consuming process. One of the most basic decisions you will make when forming your business is whether or not to have a partnerships. While the two options of sole ownership and general partnership are well known, in the state of Texas and throughout the United States there is also the option of forming a limited partnership.
Limited partnerships differ from general partnership because while general partnerships give equal responsibility, in a limited partnership there can be many limited partners and only one general partnership is necessary for the organization. Whether you are interested in being a limited partner or the general partner working with limited partners, it is important you weigh the benefits of partnerships with limited responsibility in the state of Texas before making your decision.
Advantages of Limited Partnerships
When debating whether or not to form a partnership for your business and organization, it is important to consider the benefits of all your options. The advantages of forming a limited responsibility partnership are as follows:
- Liability for the business and the responsibility of the business owners is shared across the partners, reducing the burden for all
- This means there will be limited liability options for the limited partners
- Partnerships of this form are not subject to double taxation
- Limited partners will still have access to income flow and expenditures
- In businesses with these forms of partnerships, income is taxed to the partners and not to the partnership itself
As with any important business decision, it is important to consider the benefits and limitations of all options. By knowing the above benefits of a partnership with limitations you are better able to make the decision that will be best for your company.