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  • Partnership

    When used without a qualifier such as "limited" or "limited liability," usually refers to a legal structure called a general partnership. This is a business owned by two or more people (called partners or general partners) who are personally liable for all business debts. To form a partnership, each partner normally contributes money, valuable property or labor in exchange for a partnership share, which reflects the amount contributed. Partnerships are easy to form since no registration is required with any governmental agency to create a partnership (although tax registration and other requirements to conduct business may still apply). Although not required, it is an excellent idea to prepare a written partnership agreement between the partners to define items such as ownership percentages, how profits and losses will be divided and what happens if a partner dies or becomes disabled. Partnerships themselves do not pay federal or state income taxes; rather, profits are passed through to partners who report and pay income taxes on their personal returns.

    We recommend legal and accounting assistance to form any partnership. Based on our experience as consultants to groomers we found that many partnerships resulted in dissolving due to one factor, their contract didn't stipulate CLEARLY who was to do what for the whole of the operation, and that leads to misunderstandings, which leads to...well you get the idea.
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