Are you starting your IT reseller business with a partner? Have you thought about whether your entity should be a partnership or a corporation?
Keep in mind that the information provided here is most relevant for readers in the U.S. and this information isn’t a substitute for seeking out local legal and accounting advice.
Norm Brodsky responded to a reader’s question on Inc.com who was wondering what the best way was to set up a business with a partner. There are a number of key points Brodsky addresses to keep in mind:
Remember, you really don’t know your partner well until you’ve worked together for a few years.
This is the main reason why a formal agreement is so important.
Make sure your partnership agreement is thorough and detailed without being too complicated.
The more complicated it is, the harder it is to undo if things go bad.
Get professional legal help to set this up.
A corporation will add personal liability protection, which means your personal assets are protected.
The corporation acts as its own entity and can sue and be sued. It also pays its own taxes.
There are a number of different types of corporations available to you depending on your personal circumstances. A lawyer or accountant can help you decide what’s best for you.
The Bottom Line
Whichever path you choose, it’s best to set up some type of protection for yourself, your partner, and your IT reseller business.
Have you set your IT reseller business up as a partnership or corporation? What experiences have you had with partnerships versus corporations? Please share your thoughts in the Comments box below.
And to follow-through on the tips introduced in this short article, be sure to download your free copy of the special report on How to Start a Computer Consulting Business: 6 Proven Ways to Build Your Initial Client Base.
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Topics:- Computer Consulting Business