Can Corporations Be Partners in a Partnership?

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Can Corporations Be Partners in a Partnership?

Corporations can act as partners in a partnership because state laws allow corporations to perform many of the same activities as individuals, such as entering into contracts, owning property, and recruiting/hiring employees. In a partnership, the corporation would incur various duties and liabilities as would any individual acting as a partner.

That is, the corporation would be eligible for a share of the profits, and they would be liable for losses as well. When signing a partnership agreement, an officer of the corporation would usually sign on behalf of the corporation.

Can Corporations Own Property as Partners?

Yes- part of the idea of a corporation as a legal "individual" includes the notion that the corporation can own property. This is also true if a corporation becomes a partner. Here, the corporation would be eligible to their share of the partnership properties and assets. They are also free to contribute property for the furtherance of the partnership goals. They can also own stocks and securities, of course, subject to federal and state regulations.

Special Considerations for Corporations Serving as Partners

Corporations can usually file as partners in a general partnership with no direct issues. However, for other types of partnerships, such as limited liability partnerships (LLP's), there may be some restrictions. For instance, state laws may restrict partnership in an LLP to only those individuals who hold professional licenses. Thus, if a corporation seeks to become a partner in an LLP, the corporation must usually be majority owned by licensed professionals. The corporation must also be providing the services that the individual owners hold licenses for.

Lastly, depending on state and federal laws, corporations can also be held liable for violations in a partnership setting. Again, this depends on the type of partnership being formed, but corporations can often be held liable since they are treated as individuals, legally speaking.

Do I Need a Lawyer for Assistance with Partnership Laws?

Partnership rules and laws can sometimes be complex, especially when dealing with overlapping issues such as corporate interests. You may need to hire a lawyer if you need help with partnerships, corporations, or other types of business matters. A qualified business lawyer in your area can help you with documents, drafts, contracts, and other matters. Also, you can retain an attorney in the event that you need to file a lawsuit over a business dispute.

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Last Modified: 01-02-2014 11:57 AM PST

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