Johns Creek Partnership Agreements Lawyer

You believe the synergy between you and other potential owners could develop into an exceptional business relationship. Additionally, you have chosen to form a partnership instead of a limited liability company or corporation that requires more legal compliance. However, there are still important steps to take to ensure your company’s success.

If your business venture includes other owners, speak with a Johns Creek partnership agreements lawyer. At Sparks Law, an experienced attorney could help put the terms of your relationship into writing and prevent future misunderstandings.

What is a Partnership?

A partnership involves two or more people who get together to start a business, sharing its profits and losses. Usually, partners will contribute capital or something of value to get the company off the ground, such as seed money, office space, intellectual property, or services. Georgia law does not require an agreement outline the owners’ duties and benefits, but significant problems will likely arise if one is not drafted.

Georgia Code § 14-8-7 spells out the parameters of a partnership, which include partners sharing profits. Still, a business may not be a partnership if the shared profits come from:

  • Jointly owned property
  • Interest or payment of a debt
  • Money owed to an employee or independent contractor
  • Payment to a deceased partner’s spouse
  • Money paid for the business’s goodwill

An attorney at our Johns Creek office could ensure a partnership is legal and airtight by drafting an agreement containing terms the partners agree to abide by.

Creating a Partnership in Johns Creek

Partnerships are not required to divulge much to the state, but some filing requirements attach. Nothing needs to be filed with the Georgia Secretary of State. If the business name is the surname of one or any of the owners, no filings are necessary with the Fulton County Superior Court. Note that a court filing is necessary if a trade name is used.

Owners must comply or ask for a variance for zoning issues and secure any other permits or licenses required by the county or Johns Creek. Owners must also apply for an Employer Identification Number from the IRS if wages are paid to employees. A local partnership agreements lawyer could assist in securing the necessary permits and licenses.

Is a Written Partnership Agreement Necessary?

Without a written agreement detailing the procedures and management of the partnership, problems will undoubtedly cloud the business’s future as owners disagree and cannot remember what was initially decided.

A partnership agreement takes into consideration the nuances of the business it serves: the contributions of its partners, who receive profits and in what amount, management theory, how decisions are made and disputes settled, if new partners can be admitted and under what terms, and what happens when a partner wishes to exit the business or dies unexpectedly. There needs to be some continuity if the company is to be sold, goes bankrupt, or is acquired.

Settling Disputes Without a Partnership Agreement

Georgia statutes will dictate how some disputes will be settled if there is no partnership agreement in place. For example, partners in Georgia are equally liable for company lawsuits, even if only one partner committed an act that led to the action. This means all partners risk losing their personal assets if the company loses a lawsuit.

Establishing a Limited Liability Partnership

Georgia Code § 14-8-15 describes a limited liability partnership that could protect partners from the company’s debts and the bad actions of other partners. This choice should be memorialized in a partnership agreement drafted by a skilled attorney at Sparks Law.

A limited liability partnership agreement would also give business owners the tax benefits of a general partnership but the protection from liability that a limited liability company (LLC) offers. A Johns Creek lawyer could draft a partnership agreement that speaks to these nuanced laws so owners can minimize future problems.

Consult a Johns Creek Partnership Agreements Attorney

The idea of a verbal agreement among friends sounds adequate, but it is not. The only way to start a business with others is to memorialize what the parties agree to so that no misunderstandings arise later. The best way to do this is to consult a skilled attorney who could make sure your needs are properly addressed.

A Johns Creek partnership agreements lawyer at Sparks Law can help draft a document that guides your future moves and prevents costly litigation down the line. Call for your initial consultation today.