Starting a business is never easy, but it is possible, with the right support. Every employee has dreamed of being a business owner. Unfortunately, only a small fraction of these workers will even get close to starting a business. Some will give up their dreams when they hit the first roadblock, others will continue pushing forward until they have nothing left in them to fight. If you can’t make it past the startup phase, you will never make it as a business owner. Contrary to belief, establishing a small business is just the beginning. The real issues start at the grand opening. Knowing this in advance will ease the stressors of being a business owner. In the meantime, you need to start working on a strategy for your future business.
Limited Partnership Business Structure
Every small business needs a legal structure, such as a limited partnership, partnership, sole proprietorship, corporation, and Limited Liability Company “LLC.” Each of these business structures is unique in how they will impact your Internal Revenue Service “IRS” taxes.
When you enter a limited partnership, you start working with other partners to operate a small business. The profits are also split between the partners, which means, you are not going to receive 100 percent of the profit.
In limited partnerships, all partners share the financial and legal liabilities equally. In other words, every partner is responsible for the business debt. Before you enter a limited partnership, an agreement will be laid out, regarding the specifics of sharing the profits.
There are endless benefits of a limited partnership. As you already know, the financial responsibilities are split between all the partners. You have the option of being a silent partner who is exempted from the day-to-day operations of the small business.
What Is A Limited Partner?
As a limited partner in a small business, you act as an investor. You simply fund the small business, along with the other partners. One of the main reasons why investors join limited partnerships is because it allows them to own and operate or operate another business for other people. In other words, you can run a small business while being a limited partner in another small business. You can also be a Chief Financial Officer “CFO” for a large corporation. There are many benefits of being a limited partner. However, you must decide what role you want to play in the limited partnership.
Once you decide to establish a small business through a limited partnership, you have to start getting the paperwork together. An accounting firm will help you จดทะเบียนห้างหุ้นส่วนจำกัด in a timely manner.
Protect Your Personal Assets
Businesses are constantly dealing with the public. They are providing consumers with services and/or physical goods. Anyone who knows anything about working with the public knows there are risks involved. Just the slightest mishap while providing a public service can result in a lawsuit. It is unfortunate, but many small businesses do not have enough cash on-hand to settle a lawsuit out of court.
Consumers have the legal right to sue limited partnerships just like corporations, general contractors, and nonprofit organizations. As previously mentioned, dealing with the public is risky. So, there is always the risk of being sued, regardless of hard you try to resolve issues in a timely manner. Sometimes, there is no resolution, especially when the plaintiff is willing to work it out before going to court.
Unlike small businesses, corporations, and nonprofit organizations, limited liabilities utilize their assets to cover court judgments or out-of-court settlements. In some sense, this can help protect the partners’ personal assets. Of course, you need to delve into this a little deeper before entering a limited partnership agreement.
Summary
When you want to start a small business, but do not have the funds to do it, a limited partnership is the best alternative. Limited partners share the responsibility of debts, lawsuits, and profits. It is crucial to know a limited partnership is not a Limited Liability Partnership “LLP.” Being a limited partner will also free up time for a full-time job with another company or owning and operating another small business. The possibilities are endless for limited partnerships. However, it is crucial to know what you are up against in advance.
