Mark Kohler warns that informal partnerships without written agreements can expose you to massive liability. He recommends forming an LLC with each partner operating through their own S-Corporation to protect personal assets and clarify who owns what.
Any of you that are partnering with someone, be so careful. Matt and I, literally, before we started, had a phone call about a partnership issue, someone that we might be working with, and we were like, are we exposed? Do we have anything in writing? What did we agree to? You have to be careful, people. You throw something in an email and say, hey, we're in business together and we're making money and we're doing this or we're doing that. You've got to evaluate what is that structure going to look like? Typically, a partnership is going to be an llc, and each of the partners is going to have their own S Corp.
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