Not only would there be 1120 or 1120-S instead of 1065 (to be treated as a corporation), but everybody who does any work for that entity is on payroll, not just that one person (you no longer have guaranteed payments) and that means your taxpayer client for whom you thought you prepared their 1040 is supposed to also have a W2, unless they are not involved in any of the activities? You don't incorporate just to put one person (the general partner?) on payroll. Perhaps they are thinking they might be able to sell the enterprise or attract venture capitalists.