Partnerships

Are you wondering if a partnership is the right structure for your new business? NCH can help you and your business partner determine the correct structure that will work best for your new business venture.

General Partnership

This type of business entity is formed when two or more people come together for the purpose of conducting a business. In forming a partnership, all partners must agree on which duties they will each take on and what percentage of ownership they will each hold. Typically this is done with a partnership agreement that should be put together by a lawyer. Perhaps this type of Nevada business entity could suit your business.

Similar to sole proprietorships, partnerships have many of the same advantages and disadvantages. Like sole proprietorships, partnerships are easy to form, but they are taxed according to the tax levels of each partner. Likewise, no liability protection is offered. Businesses should seriously consider the consequences of litigation without any shield to protect the owners' personal assets.

Advantages:

  • Ease of Formation
  • Pass-Through Tax Treatment (i.e., Simplicity of Reporting)

Disadvantages:

  • Personal Liability
  • Lack of Continuity
  • Lack of Investment Flexibility

Limited Partnership

Limited partnerships are composed of a minimum of two types of participants: general partners and limited partners. General partners accept the responsibility for and take all the risks involved in managing and conducting the Nevada business. Limited partners, on the other hand, are investors who share some risk, depending on the amount invested, but who have no participation in the actual management of the entity.

Limited partners simply enjoy the profits, and share in the losses, on the basis of what is stipulated in the partnership agreement. These provisions provide limited liability protection, but they do not allow any privacy for the parties involved. Limited partnerships are often used for estate planning purposes. These vehicles allow individuals to control their assets, while still having the ability to pass ownership of those assets along to their heirs. We can help you decide if a Nevada limited partnership will benefit you.

Advantages:

  • Pass-Through Tax Treatment (e.g., Simplicity of Reporting)
  • Financial Flexibility
  • IRS Discounting upon Death (e.g., Lower Estate Taxes)

Disadvantages:

  • Liability of the General Partner(s)
  • Lack of Control for the Limited Partners
  • Lack of Investment Flexibility

Limited Liability Limited Partnership (LLLP)

The Limited Liability Limited Partnership business entity combines the liability and protection benefits of incorporating with the pass-through taxation benefits of partnerships. At least two people are required to form a limited partnership – one is named a general partner and one a limited partner. Nevada now has limited liability limited partnerships. The limited liability clause results in limited legal exposure to the partners.

Family Limited Partnership (FLP)

The Family Limited Partnership is a legal business entity that can be the owner of life insurance, family vacation property and most other personal assets. A limited partnership consists of general partnership interests and limited partnership interests. An FLP is typically structured with the general partnership portion holding less than 5% of the total value of the assets of the partnership. The limited partners hold the balance of the assets.


Is a partnership the right structure for your new business?

Don't wait to take advantage of the protections the law affords you and your business. No matter what business entity you choose, it needs to be for the right reasons. Let our business formation experts help you decide if a Nevada business entity is right for you by calling 1-800-508-1729.

FREE CONSULTATION

Why Nevada?

  • You can live and run your business in any state and still incorporate in Nevada.
  • Forming your entity involves no minimum capital requirements
  • Lawsuit proof laws - If your business does get sued, your personal assets will stay safe.
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