So, you’ve found the perfect business partner, and you’re ready to start your company. Maybe you want to keep it simple and operate as a general partnership, which doesn’t require you to file documents with the state. But are there other legal documents you should draft? Yes.
If you are about to begin a business venture with another person, you should work with an experienced Alpharetta partnership agreements lawyer to establish the terms of your working relationship. Get in touch with a dedicated business formation attorney today to execute a solid contract with your partner.
When at least two people decide to commence business activities and share profits and losses, a partnership is formed. Generally, each partner will make an initial contribution to the business. Contributions may be start-up capital, property, unique expertise, or intellectual property. Although an oral agreement will do, you can run into a misunderstanding if you don’t draft and sign a written contract.
For example, although sharing profits is evidence of a partnership, the Official Code of Georgia Annotated § 14-8-7 states that no one should infer the existence of a partnership if the profits were:
With the help of a lawyer in Alpharetta, you can execute a partnership agreement and limit future disputes concerning the existence of your business relationship.
A well-drafted partnership agreement is tailored to the specific needs of the company. At a minimum, it will detail the following:
If you and your business partners’ roles and responsibilities are not stated in a written document, state law will prevail if a dispute arises. For instance, members of a general partnership are equally liable if the company is sued, even if the lawsuit only involves one partner’s negligent acts. This could lead to all the partners’ personal assets being lost.
The state allows business owners to form Limited Liability Partnerships (LLP) under O.C.G.A. § 14-8-15. An LLP affords members of the company the tax benefits of a general partnership and the legal protection of a limited liability company (LLC). A nearby attorney can inform of nuances in the law and help you draft an agreement that will minimize future misunderstandings and unwanted surprises with your partner.
The best way to avoid misunderstandings when starting a business with other people is to put everything in writing. If you’re thinking of starting a business with someone, it would be in your best interest to retain an Alpharetta partnership agreements lawyer. Contact our office today to get started.