You may wish to bring in specialized knowledge or skills such as marketing or technical expertise, obtain patents or new products, or simply provide an infusion of capital to your company. And because a certain amount of loneliness comes with the territory when you're self-employed, a partner may look like a way to lessen the isolation. Not always a good idea Martin Paskind, for one, advises against it. The retired Albuquerque business lawyer has seen lots of partnerships form and fail in his time. He estimates the odds of succeeding at 1 in 10 for passive investment partnerships, slimmer for working ones.
Partnerships raise a lot of practical issues and they raise serious legal problems, as well.
A general partnership, the type most common in small business, makes each partner equally and personally liable for the company's debts and the business activities of the other partner. That means that should your partner drain the company account, you're on the hook not just for half, but for 100 percent of the loss. General partnerships, unlike corporations, are not taxed as an entity, so each partner is typically responsible for individual, state and federal taxes, including self-employment tax. Paskind says that from a legal point of view, the risks of a partnership far outweigh the benefits in most cases. That's not exactly joy to the world.