When you are starting a business in Washington, one of the first decisions you face is how to structure it. Two of the most common options are partnerships and limited liability companies (LLCs). Both allow people to go into business together, but they carry very different rules, risks, and benefits. At the Law Office of Erin Bradley McAleer, we work with entrepreneurs and small business owners to help them choose the structure that fits their goals and protects their future.

Partnerships in Washington

A partnership is the simplest way for two or more people to own and run a business together. In Washington, a partnership can even form without any paperwork, simply by agreeing to share profits and responsibilities. While that may sound convenient, it also brings risks.

The biggest drawback of a partnership is that partners are personally responsible for business debts. If the business cannot pay, creditors can go after personal assets such as bank accounts or property. On the positive side, partnerships are easy to start, and taxes are simple because profits and losses pass directly through to each partner’s personal return. For some very small or low-risk ventures, this may be enough. For many others, the personal liability makes a partnership less than ideal.

Limited Liability Companies (LLCs) in Washington

An LLC takes the flexibility of a partnership and adds the protection of a corporation. To create one in Washington, the owners, who are called members, must file a Certificate of Formation with the Secretary of State. Most LLCs also have an Operating Agreement, which spells out how the business will be managed, how decisions will be made, and how profits will be shared.

The biggest advantage of an LLC is liability protection. In most cases, members are not personally responsible for the company’s debts. This means your home, car, or savings are shielded if the business runs into trouble. LLCs also offer flexible tax treatment. By default, profits pass through to the members, but you can choose to be taxed like a corporation if that works better for your situation. Another benefit is management flexibility. Members can run the business themselves or appoint managers to take on that role.

Key Differences Between Partnerships and LLCs

The clearest difference between the two is liability. Partnerships leave your personal assets exposed, while LLCs protect them. Partnerships can form informally, but LLCs require registration with the state and a bit more upfront effort. In return, LLCs often carry more weight with banks, investors, and vendors, who tend to view them as more stable and reliable.

Choosing the Right Structure

There is no one-size-fits-all answer. Partnerships can work well for trusted friends or family members who are launching a small, low-risk business. For most entrepreneurs, however, an LLC provides peace of mind, more flexibility, and stronger protections. Choosing the right structure early on can save you headaches later, from disputes with co-owners to personal liability for business debts.

How We Can Help

Starting a business is exciting, but it also comes with legal and financial choices that should not be overlooked. At the Law Office of Erin Bradley McAleer, we help clients throughout Washington evaluate their options, prepare the right agreements, and file the necessary paperwork to get started. Our goal is to give your business a strong foundation and protect your personal interests every step of the way.

If you are ready to form a business or are unsure which structure is right for you, contact the Law Office of Erin Bradley McAleer today. We will walk you through your options and help you move forward with confidence.