Set Up A Business Partnership
A partnership agreement is not mandatory for establishing a partnership. However, it is important to avoid misunderstandings between you and your partners. Even well intentioned, honest partners can find themselves in a legal battle if they do not have a well-drafted partnership agreement. Agreements vary from business to business and typically depend on the type of partnership you form. When you create a partnership, you need to narrow down roles, responsibilities, and liabilities. To do that, you and your partners must establish a partnership agreement.
While you can form a partnership without formally filing or registering the entity, partnerships must comply with licensing and tax requirements that apply to all Business In addition, every partnership can benefit from a partnership agreement and business insurance. There are basically two types of partnerships—general partnerships and limited partnerships. General partnerships are a risky way to operate the business because of personal liability concerns.
This silent partner generally does not participate in the management or day-to-day operation of the partnership. Many business owners are attracted to partnership businesses because of how easy they are to form. If you’re comfortable carrying unlimited liability, then a partnership could be right for you.
I have worked as a legal consultant for 10+ years and I have reviewed over 7,500 contracts through this position. I have led teams to successfully negotiate contract terms with customers. I am a people person, and for the past 13 years, I have acquired excellent oral and written communication skills that enable me to interact and negotiate effectively with stakeholders at all levels.
But, sometimes, such relationships can sour, the business can fail, and the parties can decide to go their separate ways. In the eyes of the law, by the very nature of entering into business with another party, you may be considered a partnership — whether you have a written agreement or not. It’s best to follow certain legal and practical steps to structure this relationship so that it is a win-win for all concerned. A partnership is an informal business structure consisting of two or more people. You don’t have to file paperwork to establish a partnership — you create a partnership simply by agreeing to go into business with another person.
Junior partners aren’t owners of the company and have no claim on profits; instead, they’re paid a salary. Starting and running a business can be a stressful and tiring endeavor. A potential partner should be someone who complements you and your skill set. Keep in mind that personal relationships are much different than business relationships. You need to be able to talk openly to solve problems and help the decision-making process go smoothly. If a small business partnership is indeed like a marriage, consider this process your premarital counseling.
As a law student, Mathew served as an extern for the Honorable Justice Robert E. Gordon of the Illinois Appellate Court, First District. She specializes in real estate transactional matters, property disputes, IP, tech and media contracts. Meghan’s innovative leadership style has attributed to the firm’s rapid development and presence in the metro-Atlanta market. She obtained her Doctor of Law from Emory University where she worked with the State Attorney General and litigated property disputes for disadvantaged clients. Prior to practicing, Meghan negotiated complex transactions for Fortune 500 tech and healthcare companies.
