Sole Proprietorships vs. Partnerships
01.Understanding Sole Proprietorships
A sole proprietorship is the simplest, default structure for a single-owner business. You do not need to file formal incorporation paperwork, but you have absolute personal liability for all business debts and legal actions.
02.Defining General Partnerships
When two or more individuals go into business together without formal registration, they form a general partnership. Partners share all profits, management decisions, and joint liability for the actions of other partners.
03.The Liability Risk
Because neither structure separates your personal assets from your business assets, a lawsuit against your business could result in the loss of your personal savings, home, and personal property.