Yeah so the biggest difference is, all expectations are financial. If you want to just leave for a month and input zero labor, we have no issues with that. You just still have to pay your share of rent.
If we were partners, we'd basically have to have some sort of salary or profit-sharing agreement which would likely require all manner of careful management of expectations. So, for example, say we split profit 1/3, 1/3, 1/3. Well, how do you handle the situation where one partner is not putting out? What if they become less efficient for several months because of personal issues? What if one wants to just go travel for a month? What if one partner wants to be more lenient on their tax write-offs than others are comfortable with? Rather than hash out some complicated agreement with lawyers and all that, we just operate internally as independent companies.
This way, problems are much more contained. If one partner starts fucking off, the others just stop sharing work. There is no "milking their hours" situation because that is reflected in the pre-work price negotiations. There's no unfairness in expectations, because we treat each other as separate entities and let the 'market' figure it out.
Also, everyone has complete skin in the game on their own projects and own clients.
I wouldn't say there are any inherent tax advantages except that you have complete flexibility to make it work for your own person.
If we were partners, we'd basically have to have some sort of salary or profit-sharing agreement which would likely require all manner of careful management of expectations. So, for example, say we split profit 1/3, 1/3, 1/3. Well, how do you handle the situation where one partner is not putting out? What if they become less efficient for several months because of personal issues? What if one wants to just go travel for a month? What if one partner wants to be more lenient on their tax write-offs than others are comfortable with? Rather than hash out some complicated agreement with lawyers and all that, we just operate internally as independent companies.
This way, problems are much more contained. If one partner starts fucking off, the others just stop sharing work. There is no "milking their hours" situation because that is reflected in the pre-work price negotiations. There's no unfairness in expectations, because we treat each other as separate entities and let the 'market' figure it out.
Also, everyone has complete skin in the game on their own projects and own clients.
I wouldn't say there are any inherent tax advantages except that you have complete flexibility to make it work for your own person.