Business Partnership

Are You Running A Business With Another Person?

A business partnership is a legal relationship that is most often formed by a written agreement between two or more individuals or companies. The partners invest their money in the business. Each partner benefits from any profits and sustains part of any losses. If you want to start a business with a partner, drafting a partnership agreement should be a priority on your to-do list.

What Is Business Partnership?

The partnership as a business often must register with all states where it does business. Each state may have several different kinds of partnerships that you can form. It’s important to know the possibilities before you register.

Generally, partnerships may not be the best choice of business formation because in general partnerships each partner will be personally liable for the debts and liabilities of the other partners. The purpose of forming business entities is mainly to protect your personal assets and there are other business formations that are more legally sound. And it is important to be careful because you can form a partnership through implied conduct if you are sharing profits with another. It is important to consult with a lawyer to know your legal rights. However, most often, partnerships may not be the best choice of business formation. Because in general partnerships each partner will be personally liable for the debts and liabilities of the other partners. This puts the innocent partner at risk.

The purpose of forming business entities is mainly to protect your personal assets and there are other business formations that are more legally sound. And it is important to be careful because you can form a partnership through implied conduct if you are sharing profits with another. It is important to consult with a lawyer to know your legal rights.

Types Of Partnerships

Before you start a partnership, you will need to decide what type of partnership you want. There are three different kinds that are commonly set up.

• A general partnership (GP). Consists of partners who participate in the day-to-day operations and who have liability as owners for debts and lawsuits.
• A limited partnership (LP). Has one or more general partners who manage the business and retain liability for its decisions and one or more limited partners who do not participate in the operations of the business and who do not have liability.
• A limited liability partnership (LLP). Extends legal protection from liability to all partners, including general partners. An LLP is often formed by partners in the same professional category, such as accountants, architects, and lawyers. The partnership protects partners from liability from the actions of other partners.

The difference was that a partnership can be created informally by conduct & be implied by law. In the eyes of the law partnerships are not good. They are bad! Much better to form an LLC or even a corporation.

Need Help From A Lawyer?

To help you draft a partnership agreement and form your business, call The Sterling Firm to speak with an experienced lawyer and connect with one of our top-rated business attorneys! We are available 24/7 to help you! Book Your Consultation Now! Check out our Affordable General Counsel Packages!