Partners can be a valuable part of running a successful business. However, even the most airtight partnership may see disputes and issues arise down the line. Although Florida does not require you to adopt a written agreement, this document is highly recommended to resolve future problems and prevent costly litigation.
If you are embarking on a business venture with one or more people, a Florida partnership agreements lawyer should memorialize the terms of the relationship. Let an experienced business attorney at Sparks Law help secure your company’s success by creating a well-tailored contract.
Partnerships consist of at least two people who go into business together and agree to share profits and losses. General partnerships are formed when the partners share management duties and are all responsible for the actions of other partners.
Owners can also create two forms of limited partnerships with various benefits. These could include shielding passive investors who do not share management duties from actionable poor decisions and allowing passive investors to forego filing self-employment taxes.
Usually, each partner will make an initial capital contribution to the business, which could be capital, property such as rental units, expertise in a given area such as accounting, or intellectual property.
In Florida, an agreement between partners can be implied, oral, or written. If the deal is not in writing, the company must maintain a repository of critical information at its designated office under Florida Statutes 620.1111, including:
It is apparent that it would be more expedient to adopt a partnership agreement and circumvent some of the recording duties prescribed by law. Additionally, a written agreement can help counteract any partner disputes that arise by reminding everyone of what they initially agreed upon.
A partnership agreement should speak to the partners’ wishes and act as a roadmap for running the business. It should include the partners’ names, initial and future contributions, and if they are general or limited partners. The agreement should detail how they will share profits and losses, manage the company, voting guidelines, dispute resolution, and if and how new partners can be admitted.
Additionally, there should be covenants about how to handle ownership when a partner dies or wishes to sell out, and how to dissolve or wind up the company, whether by sale, merger, or bankruptcy. At Sparks Law, an experienced Florida lawyer could help partners draft an agreement that includes the necessary information for their specific needs.
A spoken agreement or handshake is not the best way to launch a partnership or any business. Time tends to dull memory, so if you and your business partners disagree on something in the future, a written partnership agreement is the best way of solving the issue.
At Sparks Law, a Florida partnership agreements lawyer is standing by to help you memorialize your company’s plan. Call today to learn what our firm can do for you.