Going into business with a partner in Ohio may seem like a sure route to success if you and your future partner have resources, talents and skills that complement each other. Our legal team at Gemelas, Wilson, Merrill & Fritz Co. LPA works with many entrepreneurs to make sure they choose the right form of partnership for their company.
According to the Ohio Secretary of State Business Services Division, options for partnerships include general partnership, limited partnership and limited liability partnership.
General partnership
You and your partner do not have to file the Secretary of State’s registration forms in order to create a general partnership. If you are conducting a for-profit business as co-owners, the state considers you a partnership, even if you did not intend to form an official partnership. However, you may file a number of forms that can benefit your company legally and in future business transactions.
Limited partnership
Perhaps you and your partner do not want to have equal control and liability in the business. You may designate one partner as the general partner with managerial control and designate the other as a limited partner. The general partner would have a greater liability as well as greater control, and the limited partner’s liability would be equal to his or her investment. The limited partner does not have any managerial control.
Limited liability partnership
An LLP is more similar to a general partnership in that the partners share managerial control. You and your co-owner can be equally involved in the running of the business, but each partner is individually liable for the debts only up to the amount of his or her investment. So, if you choose this form of partnership, you will not be on the hook for more than you invested.
More information about business formation and partnerships is available on our webpage.