Form a partnership, filed right.

A general partnership (GP) forms automatically when two or more people do business together, with no filing and no liability protection: every partner is fully on the hook. A limited partnership (LP) has general partners who manage and are liable, plus limited partners who invest and are shielded as long as they stay passive; it's common in real estate and funds. A limited liability partnership (LLP) protects every partner from the business's debts and from a co-partner's malpractice, which is why law and accounting firms use it. All three are taxed the same pass-through way; they differ on who bears the risk.

An LLC is often the simpler choice for a small group: it gives every owner liability protection, pass-through taxes, and flexible management with less structure than an LP. A partnership makes sense when you specifically want the LP's split of active and passive owners, or the LLP that certain professions and states favor, or when your profession is steered toward an LLP. If you're unsure, an LLC covers most two-or-three-person businesses well; we'll tell you when an LP or LLP genuinely fits your situation better.

Yes, more than almost any other document. Without one, your state's default partnership rules decide how profit splits, who can bind the business, and what happens when a partner leaves, and those defaults are rarely what you'd choose. A written partnership agreement settles profit and loss allocation, decision-making, contributions, and buyout terms while everyone is still aligned. The vast majority of partnership disputes trace back to something the agreement should have covered. We give you a template to start from at formation.

Partnerships are pass-through by default: the partnership itself pays no income tax, but it files an informational return and issues each partner a Schedule K-1 reporting their share of profit or loss, which they report on their personal returns. Partners generally pay self-employment tax on their share of active income. It's similar to a multi-member LLC's default treatment. Because the allocations and each partner's basis can get involved, this is an area worth a CPA's review; we form the entity and keep your records clean, and point you to a tax professional for the return.

Often, yes. Many states limit the LLP to specific licensed professions, such as law, accounting, architecture, or medicine, and some require the partners to carry professional liability insurance. Other states allow any business to form an LLP. Where your profession or state doesn't permit an LLP, the usual alternatives are an LLC or a PLLC for licensed work. We confirm whether your state and profession allow an LLP before filing, so you don't pick a structure that isn't available to you.

Yes, and that's the classic structure: one general partner who manages and bears the liability, with one or more limited partners who invest and stay passive. The catch is that the general partner has unlimited liability, which is why many LPs use an LLC or a corporation as the general partner, so no individual is fully exposed. It's a common, powerful setup for funds and real estate. Tell us how you want management and liability arranged, and we'll structure the general-partner role to protect the people running it.

Usually, yes. As a business grows, many partnerships convert to an LLC or a corporation for broader liability protection or to bring on investors, and most states have a process for it, though the tax treatment of the conversion needs care. It's cleaner to start with the structure you'll want if you already know, but converting later is a normal step and not a do-over. We can handle the conversion filing and coordinate the timing when you're ready to make the move.

Yes. Non-residents can be partners in a US LP or LLP; you don't need to be a citizen or resident to hold a partnership interest. The partnership will need a US EIN, which we obtain from the IRS without an SSN, and there are withholding and reporting rules that apply when a partnership has foreign partners, so the tax side needs a professional's attention. We form the entity and set up the basics; for the cross-border tax specifics, we'll point you to a CPA who handles them.