The owner, generally, is solely responsible for business risk. Revenues and expenses are reported on Schedule C - which is a supplemental schedule of Form 1040 Individual Federal Tax Return. May be liable for filing 1040 estimates depending on circumstances If the business employs outside help, you will be subject to other reporting requirements for both state and federal agencies. Similar to a proprietorship in most ways except that it involves more than one owner. A partnership is not a legal economic unit separate from the owners but an unincorporated association that brings together talents and resources of two or more people.
Partners have to share both liability and business risk.
Each owner s share of income or loss is reported on his or her personal tax return subject to the individual marginal tax rate Income is also subject to self-employment tax. If the business employs outside help, you will be subject to other reporting requirements for both state and federal agencies. Although not required, a partnership agreement is suggested. It allows for structural flexibility in planning distributions and allocations. All members of an LLC can participate in the management, without risking loss of liability protection.