Partnership vs. Contract Work

Question

I've been freelancing for a while and would like to step up my game a little. As my client base grows, I find myself employing the help of close associates and enjoy consistently working with them and the creativity and experience they bring to each project so, I'm thinking of creating a little entity to make it more official and position myself as more of an agency than one guy doing all the work.

My question is, am I better off sticking with project-to-project contracts with my associates, or are there greater benefits from creating a 2- or 3-person partnership?

Answer 1

It depends on how you want to "step up your game" - there are a lot of considerations.

Are you looking to grow your business? Do you have enough work to keep you and your partners busy? If the answers to both of these are "yes" then changing the business entity (solo practice to partnership) is warranted.

There will be more paperwork in a multi-person company, and what that entails will be decided on what kind of entity you will be forming. General or limited partnerships or corporations - you will need to consult with an accountant (for changes in your tax requirements) and a lawyer. General partnerships (in the US) give each partner more "rights" than your spouse has in a marriage.