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    If you start a business and are the sole owner, you are automatically considered a sole proprietor. You have no protection from liability for the debts of the business and you file your taxes on Schedule C of your 1040. Most people understand this, but what happens if there are two owners and no business entity is selected?

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    If you start a business and are the sole owner, you are automatically considered a sole proprietor. You have no protection from liability for the debts of the business and you file your taxes on Schedule C of your 1040. Most people understand this, but what happens if there are two owners and no business entity is selected?

    To the surprise of many,

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    usiness and are the sole owner, you are automatically considered a sole proprietor. You have no protection from liability for the debts of the business and you file your taxes on Schedule C of your 1040. Most people understand this, but what happens if there are two owners and no business entity is selected?

    To the surprise of many,

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    this, but what happens if there are two owners and no business entity is selected?

    To the surprise of many, a business with two or more owners that does not actively form a business entity is considered a general partnership. A general partnership is generally not an entity that should be used unless you absolutely must. Why? Well, the entity provides no liability protection to the owners. If you partner takes a client to lunch, has a few drinks and then crashes into another car on the way back to the office, he, you and the business are all liable for any

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