If I’m starting a business with a partner, does it make more sense to set up a partnership or an LLC?

UPDATED: Jul 6, 2015

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If I’m starting a business with a partner, does it make more sense to set up a partnership or an LLC?

I also have a question is about registered business name versus DBA’s. We have 2 businesses with separate branding and were planning on one registered business name with both DBA’s under it. But I was wondering if there was any reason why we shouldn’t make the registered business name the same as one of the DBA’s?

Asked on July 6, 2015 under Business Law, Missouri


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 7 years ago | Contributor

1) Opinions can vary, but I recommend an LLC: having an LLC will provide protection from many or most business-related debts or liability (hence the term "limited liability company") which can be invaluable; and if you elect to be taxed as partnership, it has the same tax effect as actually being a partnership.

2) There is no reason to not use the registered business name as the name you are doing business under UNLESS you anticipate the possibility of shutting down that business at some point, and want to be able to more easily discontinue use of that name; or contemplate eventually having multiple different businesses, with no one being prime or main, in which case it may not be appropriate to have one business among many have your registered name, which would imply primacy. In the real estate space, for example, there is often a registered name for the holding company, which then does business under names relating to each individual property it buys or invests in. However, this is just a matter of preference; there's no legal reason why can't do what you suggest.

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