• Tanya S Osensky

How I Help: Startups with Partners

Last week I mentioned a client who is starting a new tutoring business and was not sure if he needed an LLC or if he could operate as a sole proprietorship.

During our conversation I learned that he is considering starting his company with another person. In that case, forming a legal entity like an LLC is almost a given.

With a partnership, each partner has liability exposure for the other partner’s actions. An LLC provides liability protection for each of them. Also, an LLC operating agreement that documents the relationship is crucial to get the relationship off to a good start.

What I do is explain the pros and cons of different legal entities and make sure the company is formed properly. I also create a custom operating agreement that will serve for many years to come.

If you are thinking of starting a new business with a partner, consider if you've ever had a disagreement with anyone that didn’t end well.

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