What is a disadvantage of an LLC compared to a general partnership?

A limited liability company (LLC) does require a legally binding operating agreement, which governs the business operations and the relationship among members. This requirement can be seen as a disadvantage compared to a general partnership, where there may be more flexibility since a partnership can operate on a verbal agreement or informal arrangement without formal documentation.

In general partnerships, the absence of a formalized contract can allow for easier establishment and operation, which might appeal to some entrepreneurs who prefer a more straightforward, less bureaucratic structure when starting a business. In contrast, the necessity of an operating agreement for an LLC implies a layer of complexity that may deter those looking for simplicity in their business formation.

The other aspects like unlimited capital contributions, member restrictions, and management flexibility actually highlight some of the benefits of an LLC compared to a general partnership, rendering those options less suitable in this context.