General Partnership Attorneys
What is a General Partnership?
A general partnership is the most basic and most common type of partnership. In a general partnership, each partner is held responsible for the profits, losses, and violations of all business activities. The partnership is formed by filing the required papers and documents with state business authorities.
A notable characteristic of general partnerships is that the entity will terminate automatically upon the death, withdrawal, or incapacitation of any general partner. This makes the partnership subject to potential dissolution in the future, although it helps to keep the business under the control of the general partners.
What is a Partnership Agreement?
A partnership agreement is the contract that is used to define the terms of operation for the partnership. It will state important information including: the names of the partners, the name of the partnership, the purpose and aim of the partnership, termination provisions, profit divisions, and losses/liability specifications.
In addition, a partnership agreement may also address the issue of property distribution in a partnership. In most general partnerships, the partners share equally in the rights of any property that is classified as partnership property. The partnership agreement is a very important document, as it will outline the limits and scope of the partnership’s operation for the years to come.
How Does Liability Work in a General Partnership?
General partners are individually and jointly responsible for any losses or debts incurred by the general partnership. The partnership agreement may lay out specific details regarding liability, but the main idea is that the partners share in the liability of the partnership.
Thus, partners should understand that by being part of a partnership, they may be incurring various risks and exposing themselves to certain liabilities that would not exist if they were acting alone. However, the tradeoff is that general partnerships often allow for more access to resources, and more leverage in terms of marketing and other business activities.
Do I Need a Lawyer for Assistance with General Partnership Laws?
General partnership laws can sometimes be very specific and can involve some complex legal concepts. It may be necessary for you to hire a business lawyer in your area for help with the creation of a general partnership. Your lawyer can guide you through the process to ensure that the business entity conforms to state requirements. Also, your lawyer can represent you in court in the event that a legal dispute needs to be litigated.
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Last Modified: 07-19-2013 10:45 AM PDT
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