Like sole proprietorship, general partnership is another entity that is easy to setup. There are no legal requirements for registrations except it may have to register business name with the county office. It is an association of two or more people to join a business venture for profit and can be organized by mutual agreement and understanding. It is also governed by common law of the state for partnership entities. Partnership type entity is easy to dissolve with mutual consent, or automatically upon death of a partner, resigning of a partner, completion of the venture or project or completion of the term.
Like sole proprietorship, partners are personally liable for partnerships obligations and debt. They do not enjoy the feature of LLC or a corporation of limited liability and protection of personal assets.
LLC in that sense is a better choice though it involves legal registration process. The members enjoy the features of limited liability and protection of personal assets. LLC has features of corporation and partnership; therefore it can serve the purpose of both.
Tax filing could be the same, if LLC chose and eligible for filing partnership tax return. Both will file the same type and same style of tax return that is “Partnership Tax Return”. General Partnership and LLC is not a taxable entity, and its profit and loss pass through to its members.
The functioning & management of LLC and partnership can be managed through mutual agreement.
Dissolution of LLC will require reporting and following of certain legal and tax formalities, whereas Partnership can be dissolved or terminated by without any legal formalities except for filing final tax return.