Am I doing this correctly?
Hey guys so I am hoping to start a company with 2 of my friends. The plan is we will pool our money and invest it together based on what we want to do. We want our expenses/gains/losses to flow through this partnership. Do we need to file with the state? Or can we just do this and come tax time create a K-1 for ourselves. We want to have a business bank account so to do this I thought you had to file. Any advice or pointers would be appreciated. Are we even allowed to do this?
Thanks
Im no lawyer.. but yes you should file w/state and have articles of incorporation that outline each partners ownership and what would happen in the event that a partner exits, etc. Partnerships can go very wrong - I know from experience so you have to outline every detail if your dealing with any serious amount of money.
Also, you get legal protections by registering under certain ownership structures which is obviously advisable. Just my personal opinion - again not a legal opinion.
Awesome thank you, thats what i was thinking as well. Never know what could happen and need to prepare for the worst. From a tax standpoint do you know if you have to file to be able to take tax deductions? Or can you just do it and submit a K-1 without filing with the state.. I have no experience with this, so just wondering. thanks
That will depend on what corporate structure you file under. What will you be filing as?
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