• 7809 Airline Drive, Suite 201, Metairie, Louisiana 70003. USA
  • 504.298.DOCS

Advantages of Partnerships

  • Somewhat lower cost to organize since there are no incorporating fees.
  • Less formality in record keeping.
  • The owners file one tax return.
  • Owners can deduct losses that might be incurred during the early life of the business from other personal income.
  • Owners can make tax-deductible contributions to “Keogh” type pension and profit sharing plans.
  • Profits of a partnership, unlike dividends paid by a corporation are not subject to a second Federal income tax when distributed to the owners. (Whether this is an advantage, tax wise. Depends on certain other factors, namely: The individual tax brackets of the owners as compared with that of the corporation.
  • The extent to which double taxation of earnings of the corporation is eliminated by deductible salaries paid to owners and by retention of earnings in surplus.

Disadvantages of Partnerships

  • Unlimited personal liability. The owners are personally liable for all debts and judgements against the business, including liability in case of failure or other disaster.
  • In a partnership, each member can bind the other so that one partner can cause the other to be personally liable.
  • If the owner(s) dies or becomes incapacitated, the business often comes to a standstill.
  • The owner(s) do not have the full tax benefits of the tax-deductible plans including pension and profit sharing that are available to a Corporation.

Unlimited personal liability. The owners are personally liable for all debts and judgements against the business, including liability in case of failure or other disaster.

About Us

mi1Corporation Services, Inc. provides legal help with the formation of business entities such partnerships, limited liability companies, and corporations in the State of Louisiana.

 
  • 7809 Airline Drive, Suite 201, Metairie, LA 70003. USA
  • 504.298.DOCS
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