I am not licensed in CA, but the benefit of an LLC over a partnership generally is that, as its name suggests, it limits liability. If someone eats a bad tomato from your business, and then sues the LLC, only the assets of the LLC will be readily subject to judgment. Conversely, in a partnership, the liability can (and does, generally... Again, I a, not licensed in CA, but doubt it is different there) and does run to the partners themselves. So you could lose your house over that bad tomato in a partnership.... Whereas in an LLC you can only lose your company.
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My colleague above is correct. However, sometimes you can get adequate protection from insurance and avoid having to organize a separate company. Unfortunately, your insurance premiums are likely to be as much as the $800 minimum franchise tax on LLCs, and even if you do form an LLC you should consider insuring your activity nonetheless.
Please note, however, that you can't be both a partnership/LLC and a sole proprietorship. If you and your brother enter into this activity together and divide its profits, you've created a partnership for tax purposes whether you file any sort of paperwork with the state or not. You won't be separate sole proprietors.
I urge you to get a lawyer, CPA, and insurance agent on your team. General Partnerships are almost never used anymore because of the unlimited liability of each partner for the entire debts of the partnership. Even if it is your brother, consider a buy-sell agreement to pre-determine value for a buy out if the other partner dies, retires or becomes permanently disabled.
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I agree with my colleagues - most notably in that a general partnership is not the best approach. Please see the post at the link below.
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All the attorneys are correct. A general partner has unlimited liability. It sounds like your business is going to be involving the public so your personal exposure could be great. The LLC can be taxed as a partnership or corporation, so from a tax standpoint it is tax neutral. The real issue is liability. The minimum tax is generally worth the liability protection. You really should sit down with a business or corporate attorney to discuss you goals and plan.
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