Forming Company

searcher profile

June 05, 2024

by a searcher from The University of Chicago - Booth School of Business in Chicago, IL, USA

I'm forming a self-funded search company with a partner. Does anyone have guidance on pros/cons of LLC vs. Partnership?

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commentor profile
Reply by a professional
from Harvard University in Lynbrook, NY 11563, USA
Assuming you're comparing an LLC to an LP/LLP, why would you go with an LP? I doubt anyone here has seen an operating company that is an LP in the search fund context. You find them in investment fund spaces generally.

If you're asking about tax treatment, an LLC can be taxed as anything - disregarded entity (if it only has one member), a partnership, an S corp, or a C corp, depending on your election.

Happy to discuss but wouldn't go fancy here unless there's some unique circumstance. Would just copy what other searchers do.
commentor profile
Reply by a professional
from University of Michigan in Detroit, MI, USA
^redacted‌, I agree with the other posters. Unless there are some special circumstances at play, I can't think why you would choose anything other than an LLC. LLCs are simple to organize and highly flexible.
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